Japanese Yen Extends Fall Against Majors
The Japanese yen dropped against its key counterparts in the
Asian session on Wednesday, extending a decline seen yesterday,
amid a widening interest rate differential between Japan and other
While the U.S. Federal Reserve is expected to continue its
aggressive policy tightening to tame inflation, the Bank of Japan
is sticking to ultra easy monetary policy to support the
BOJ Governor Haruhiko Kuroda rejected the possibility of a
monetary tightening earlier this week and promised to continue its
current policy stance to boost recovery from the pandemic.
In contrast, the Fed is expected to raise interest rate by
half-point at its meetings due next week and in July.
Investors await interest rate decision from the European Central
Bank and the release of U.S. inflation data for more clues about
monetary policy outlook.
Data from the Cabinet Office showed that Japan's gross domestic
product contracted an annualized 0.5 percent on year in the first
quarter of 2022 - beating forecasts for a decline of 1.0 percent
following the 3.8 percent increase in the previous three
On a seasonally adjusted quarterly basis, GDP slipped 0.1
percent - again topping expectations for a decline of 0.3 percent
following the 0.9 percent gain in the three months prior.
The yen declined to more than a 20-year low of 133.30 against
the greenback and a 1-1/2-month low of 167.46 against the pound,
from its early highs of 132.54 and 166.83, respectively. The yen
may challenge support around 135.00 against the greenback and
170.00 against the pound.
The yen reversed from its early highs of 141.83 against the euro
and 95.74 against the aussie and touched a 7-1/2-year low of 142.40
and a 7-year low of 96.20, respectively. The yen is likely to face
support around 144.00 against the euro and 98.00 against the
The yen depreciated to a 1-1/2-month low of 86.24 against the
kiwi and an 8-1/2-year low of 106.23 against the loonie, off its
prior highs of 85.88 and 105.76, respectively. The next likely
support for the yen is seen around 88.00 against the kiwi and
108.00 against the loonie.
The yen edged down to 136.71 against the franc, after rising to
136.16 earlier in the session. The yen is seen finding support
around the 138.00 mark.
Looking ahead, U.K. construction PMI for May and Eurozone GDP
and employment reports for the first quarter are due out in the
U.S. wholesale inventories for April will be published in the
New York session.
Euro vs Yen (FX:EURJPY)
From Aug 2022 to Sep 2022
Euro vs Yen (FX:EURJPY)
From Sep 2021 to Sep 2022