Yen Falls Amid Risk Appetite
October 31 2017 - 11:08PM
RTTF2
The Japanese yen slipped against its major opponents in the
Asian session on Wednesday amid rising risk appetite, as demand for
safe-haven assets waned on optimism about global economic growth
after data showed that U.S. consumer confidence in October rose to
its highest level in nearly 17 years and China's Caixin
manufacturing Purchasing Managers' Index for October matched
expectations.
The U.S. Federal Reserve announces its monetary policy decision
later today. While no policy changes are expected, investors may
get some clues in the policy statement as to whether the U.S.
central bank is on track to raise rates in December.
The Bank of England will reveal its interest-rate decision on
Thursday, with traders bracing for what could be the central bank's
first rate increase in more than a decade.
Survey data from IHS Markit showed that Japan's manufacturing
activity continued to expand strongly in October, underpinned by
solid expansions in output, new orders and employment.
The Nikkei Manufacturing Purchasing Managers' Index, or PMI
dropped marginally to 52.8 in October from 52.9 in September.
However, any reading above 50 indicates expansion in the
sector.
The currency fell on Tuesday, after the Bank of Japan left its
monetary stimulus unchanged but lowered its inflation outlook.
The yen declined to a 5-day low of 113.96 against the greenback,
compared to Tuesday's closing value of 113.62. If the yen weakens
further, 115.00 is possibly seen as its next support level.
The yen that closed Tuesday's deals at 113.90 against the franc
weakened to 114.07. Continuation of the yen's downtrend may see it
challenging support around the 116.00 area.
The yen hovered around an early 1-week low of 151.29 against the
pound, down from yesterday's closing value of 150.91. The next
possible support for the yen is seen around the 153.00 level.
Data from the British Retail Consortium showed that UK shop
price deflation remained at a four-year low in October.
The BRC-Nielsen shop price index dropped 0.1 percent, the same
annual rate as seen in September. The 0.1 percent deflation was the
shallowest deflation rate in the last four years.
The yen slipped to a 2-day low of 87.30 against the aussie and a
weekly low of 78.71 against the kiwi, compared to yesterday's
closing quotes of 86.99 and 77.77, respectively. On the downside,
90.00 and 81.00 are likely seen as the next support levels for the
yen against the aussie and the kiwi, respectively.
The yen held steady against the loonie, after falling to a 2-day
low of 88.10 in early Asian deals. The pair closed Tuesday's
trading at 88.15.
On the flip side, the yen rebounded slightly against the euro
with the pair trading at 132.47. This may be compared to a 5-day
low of 132.60 hit at 9:00 pm ET. The euro-yen pair was valued at
132.34 when it closed deals on Tuesday.
Looking ahead, U.K. manufacturing PMI and Swiss SVME
manufacturing PMI for October are due in the European session.
In the New York session, ADP private payrolls data and ISM
manufacturing index for October and construction spending for
September are set for release.
At 1:15 pm ET, SNB Governing Board Member Fritz Zurbrugg will
deliver a speech titled "Loans, Debt, and Growth" at the University
of Bern.
At 2:00 pm ET, the Fed announces its decision on monetary
policy. The central bank is widely expected to leave interest rates
unchanged at 1 percent to 1.25 percent range.
The Bank of Canada Governor Stephen Poloz will testify along
with Senior Deputy Governor Carolyn Wilkins before the Standing
Senate Committee on Banking, Trade and Commerce, in Ottawa at 4:15
pm ET.
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