European Session – Yen jumps as Japan minister signals risks of excessive weakness
May 20, 2013 7:33 am
The yen was the big story today, being the biggest mover in the start of the new trading week after jumping on remarks made by Japan’s Economy Minister.
Akira Amari signalled that the recent sharp decline in the yen could pose certain risks.
The Japanese minister also said that the yen’s past strength has “been corrected a lot.”
“If the yen extends losses a lot, people’s lives will be negatively affected. It’s our job to minimize that, ” he added.
The Japanese government said the economy was showing signs of recovery and has upgraded its assessment of the economy in May.
The early morning news caused yen to spike against most its major counterparts, reversing recent losses made due to the effect of the Bank of Japan’s bold monetary measures to stimulate Japan’s economy.
While the weaker yen would make Japanese exports more competitive, which is advantageous for the export-reliant economy, it will also make imports more expensive, which could also have negative consequences.
USDJPY fell off a four-year high of 103.29 hit last Friday and tumbled to a low of 101.95 in the early Asian trade before steadying around 102.70.The pair opened the session with a gap down at 102.73 from Friday’s close of 103.27 yen.
EURJPY dipped to 130.91 from Friday’s high of 132.52 and stabilized around 131.90 before heading into the European session.
In other currencies, most major pairs remained steady and consolidated moves made on Friday when dollar was the outperformer after rallying strongly after upbeat US data fueled speculation the Federal Reserve will consider cutting back on stimulus measures which have been weakening the dollar.
On Friday the University of Michigan consumer sentiment report was released, giving the best results since July 2007.
EURUSD fell to as low as $1.2795 after the data and consolidated near these levels in today’s Asian session.
GBPUSD fell to $1.5157 and remained close to these lows in Asia today.
The economic calendar is light in the upcoming European session since major European markets are closed for a bank holiday today (Germany and France), so we expect volumes light volumes.
The yen was the big story today, being the biggest mover in the start of the new trading week after jumping on remarks made by Japan’s Economy Minister.
Akira Amari signalled that the recent sharp decline in the yen could pose certain risks.
The Japanese minister also said that the yen’s past strength has “been corrected a lot.”
“If the yen extends losses a lot, people’s lives will be negatively affected. It’s our job to minimize that, ” he added.
The Japanese government said the economy was showing signs of recovery and has upgraded its assessment of the economy in May.
The early morning news caused yen to spike against most its major counterparts, reversing recent losses made due to the effect of the Bank of Japan’s bold monetary measures to stimulate Japan’s economy.
While the weaker yen would make Japanese exports more competitive, which is advantageous for the export-reliant economy, it will also make imports more expensive, which could also have negative consequences.
USDJPY fell off a four-year high of 103.29 hit last Friday and tumbled to a low of 101.95 in the early Asian trade before steadying around 102.70.The pair opened the session with a gap down at 102.73 from Friday’s close of 103.27 yen.
EURJPY dipped to 130.91 from Friday’s high of 132.52 and stabilized around 131.90 before heading into the European session.
In other currencies, most major pairs remained steady and consolidated moves made on Friday when dollar was the outperformer after rallying strongly after upbeat US data fueled speculation the Federal Reserve will consider cutting back on stimulus measures which have been weakening the dollar.
On Friday the University of Michigan consumer sentiment report was released, giving the best results since July 2007.
EURUSD fell to as low as $1.2795 after the data and consolidated near these levels in today’s Asian session.
GBPUSD fell to $1.5157 and remained close to these lows in Asia today.
The economic calendar is light in the upcoming European session since major European markets are closed for a bank holiday today (Germany and France), so we expect volumes light volumes.
Related Posts: