Yen Rises Amid Risk Aversion
May 29 2015 - 4:51AM
RTTF2
The Japanese yen strengthened against most major currencies in
the early European session on Friday amid risk aversion, as
European shares fell amid mixed signals over the status of Greece's
debt talks and surprisingly unguarded remarks by IMF chief
Christine Lagarde that a Greek exit would not signify an end to the
single currency.
The U.K.'s FTSE 100 index is currently down 0.15 percent or
10.78 points at 7,030, France's CAC 40 index is down 0.48 percent
or 24.71 points at 5,113 and Germany's DAX is down 0.81 percent or
95.17 points at 11,582.
In an interview with German newspaper, Lagarde said a deal with
Athens was unlikely to be reached over the next few days, and
Greece's exit from the Eurozone is a possibility.
However, a government spokesman reportedly said that Greece aims
to strike a rescue deal with its international creditors by Sunday
to avoid a default or bankruptcy.
Investors also look forward to the release of first quarter GDP
data due out later in the day, for clues on the timing of a Federal
Reserve interest rate increase.
The outcome of a meeting of G7 finance ministers in Dresden
today could shed more light on how Greece's international creditors
seek to end the impasse.
In other economic news, data from the Ministry of Internal
Affairs and Communications showed that Japan's consumer price index
were up 0.6 percent on year in April, slower than the previous
month's 2.3 growth. On a monthly basis, overall CPI were up 0.4
percent and core inflation rose 0.3 percent.
Data from the Ministry of Economy, Trade and Industry showed
Japan industrial production climbed a seasonally adjusted 1.0
percent month-over-month in April, in line with expectations,
reversing a 0.8 percent fall in March. It was the first increase in
three months.
On an annual basis, industrial output edged down 0.1 percent in
April, much slower than previous month's 1.7 percent decrease. The
figure was also matched with consensus estimate.
Data from the Ministry of Land, Infrastructure, Transport and
Tourism showed that Japan's housing starts grew 0.4 percent
year-on-year in April, but slower than the 0.7 percent increase
seen a month ago. Nonetheless, the annual growth exceeded a 0.2
percent rise forecast by economists. This was the second
consecutive rise in housing starts. The number of construction
orders received by big 50 contractors declined 12.1 percent from
last year, reversing March's 8.2 percent increase.
In the Asian session today, the yen held steady against its
major rivals.
In the European trading now, the yen rose to 135.42 against the
euro, from an early 135.42 near 2-week low of 135.90. If the yen
extends its uptrend, it is likely to find resistance around the
132.50 area.
The yen advanced to a 3-day low of 189.17 against the pound,
from an early lows of 189.99. On the upside, 185.00 is seen as the
next resistance level for the yen.
Against the Swiss franc, the yen edged up to 130.75 from an
early low of 189.99. The yen may test resistance near the 127.50
region.
Looking ahead, the first quarter Canada GDP data, second
estimate of U.S. GDP data for first quarter and University of
Michigan's final consumer sentiment index for May are due to be
released in the New York session.
At 7:00 am ET, European Central Bank board member Yves Mersch
speaks at the Bulgarian Authorities 2015 IMF/World Bank
Constituency Meetings, in Sofia, Bulgaria.
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