Japanese Yen Climbs Ahead Of Fed Outcome
June 16 2021 - 3:31AM
RTTF2
The Japanese yen advanced against its major rivals in the
European session on Wednesday, as investors turned cautious ahead
of the outcome of policy meeting by the U.S. Federal Reserve due
later in the day.
The central bank is not expected to take any immediate action,
but investors will be parsing the statement to see whether the
policy makers consider starting discussions about scaling back $120
billion bond purchase program.
The Fed will also publish economic and interest rate
projections, and expectations are that the so-called dot plot could
point to a rate hike in 2023.
Official data showed that China's industrial production and
retail sales grew less than expected in May.
Industrial production grew 8.8 percent on a yearly basis in May,
weaker than the economists' forecast of 9 percent.
Retail sales expanded 12.4 percent annually, which was slower
than the expected increase of 13.6 percent.
Data from the Ministry of Finance showed that Japan posted a
merchandise trade deficit of 187.1 billion yen in May.
That missed expectations for a shortfall of 91.2 billion
following the downwardly revised 253.1 billion yen surplus in
April.
Data from the Cabinet Office showed that Japan core machine
orders rose a seasonally adjusted 0.6 percent on month in April -
coming in at 802.9 billion yen.
That missed expectations for an increase of 2.7 percent and was
down from 3.7 percent in March.
The yen rose to 2-day highs of 109.90 versus the greenback,
133.23 versus the euro and 90.19 versus the loonie, after falling
to 110.14, 133.59 and 90.43, respectively in early deals. The
currency is likely to find resistance around 108.00 versus the
greenback, 130.00 versus the euro and 88.00 versus the loonie.
The yen recovered to 155.00 against the pound and 78.44 against
the kiwi, from its prior lows of 155.38 and 78.68, respectively. On
the upside, 150.00 and 76.00 are likely seen as its next resistance
levels against the pound and the kiwi, respectively.
In contrast, the yen weakened to 84.76 against the aussie from
Tuesday's close of 84.56. If the yen falls further, it may
challenge support around the 86.00 level.
Looking ahead, Canada CPI, U.S. housing starts and building
permits and import and export prices, all for May, are due out in
the New York session.
At 2:00 pm ET, the Fed announces its decision on interest rate.
Economists widely expect the federal funds rate to be kept at
0-0.25 percent.
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