Yen Extends Fall Amid Risk Appetite
December 09 2016 - 4:02AM
RTTF2
The Japanese yen extended its early slide against its major
rivals in the European session on Friday amid risk appetite, as
European shares rallied tracking record close from the Wall Street
and oil prices advanced ahead of a summit of major crude producers
in Vienna this weekend.
The European Central Bank on Thursday signaled that it would
extend stock purchases through December 2017, although it scaled
back the purchase amount to EUR 60 billion a month, starting in
April. The decision pulled down the euro and euro area bond yields,
while lifting stocks.
Oil prices climbed, with investors awaiting a meeting of OPEC
and non-OPEC countries taking place in Vienna on December 10, in
order to finalize output cuts agreed last week.
Investors look ahead to next week's Federal Reserve meeting amid
expectations the U.S. central bank will raise rates by a quarter
percentage point to a target range of 0.5 percent to 0.75
percent.
Data from the Bank of Japan showed that Japan M2 money stock
rose 4.0 percent on year in November, coming in at 951.8 trillion
yen.
That exceeded forecasts for 3.7 percent, which would have been
unchanged from the October reading.
The currency has been trading in a negative territory in the
Asian session.
The yen weakened to more than a 10-month low of 115.16 against
the greenback and a 3-day low of 145.10 against the pound, from
yesterday's closing values of 114.03 and 143.49, respectively.
Continuation of the yen's downtrend may see it challenging support
around 118.00 versus the greenback and 148.5 against the pound.
The yen dropped to 121.69 against the euro and 113.05 against
the Swiss franc, compared to Thursday's closing quotes of 121.02
and 112.19, respectively. The next possible support for the yen may
be found around 126.00 against the euro and 116.00 against the
franc.
The yen declined to a 1-year low of 82.52 against the kiwi,
7-1/2-month lows of 86.09 against the aussie and 87.36 against the
loonie, down from Thursday's closing values of 81.79, 85.09 and
86.44, respectively. If the yen extends slide, it may possibly find
support around 84.00 against the kiwi, 88.00 against the aussie and
89.00 against the loonie.
Looking ahead, U.S. wholesale inventories data for October, U.S.
University of Michigan's preliminary consumer sentiment index for
December and U.S. Baker Hughes rig count data are set to be
published in the New York session.
At 10:15 am ET, European Central Bank Executive Board Member
Benoit Coeure is expected to participate in a panel discussion on
"Policy Responses: Restoring Public Trust in Economic Reforms" at a
conference on "Challenges to More Sustainable and Inclusive Growth
in Europe", hosted by the Council of Europe Development Bank in
Paris.
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