The yen was one of the worst performing major currencies during the Asian session on Wednesday after the currency weakened in reaction to a Nikkei newspaper report that the Bank of Japan may cut interest rates deeper into negative territory.
The Japanese currency added to yesterday’s losses when it weakened 0.7% and it softened 0.6% in Asian trading today. The US dollar rose to a session high of 103.18 yen, marking a fresh one-week high.
The diverging monetary policies of the Bank of Japan and the Federal Reserve is another main driver behind the dollar’s strength against the yen. The Fed is moving closer to hiking rates while the BoJ as well as other major central banks are easing.
Meanwhile, data out of Japan today showed the initial estimate on the July industrial production figure was revised lower. There was a decline of 0.4% month-on-month in July after rising 2.3% in June. Economists estimated zero growth following the preliminary estimate made at the end of August. The soft data impacted the yen further.
There are no major US data releases today and no Fed speakers due to the blackout period so the dollar is expected to hold onto gains.
Sterling consolidated losses against the dollar after a sharp tumble yesterday on soft UK inflation data. The pound traded to a two-week low of $1.3165 in Asian trading. The main risk for the pound will be UK jobs data later today.
The euro recovered some losses against the dollar after yesterday’s tumble to $1.1203 and climbed to a session high of $1.1226.
The Australian dollar posted a modest rebound after sliding yesterday and was up 0.2% at $0.7485. Data out of Australia today had little impact on the currency. Westpac’s consumer confidence index for September rose 0.3% in September to 101.4, following a 2% increase the prior month.
Gold, which is sensitive to monetary policy expectations, was flat around $1,320, after having fallen for five consecutive days to Tuesday.
WTI oil futures moved off yesterday’s lows when prices fell below $45 a barrel, and gained 0.5% to $45.10. Oil prices weakened this week after the International Energy Agency revised its outlook for supply and said it expects a glut persisting into 2017. The EIA crude oil inventory report is due later today.
Other data to focus on later today include the UK employment report as well as European industrial production data. Focus will also be on European Commission President Jean Claude Juncker who will address the EU parliament later today and will give the “State of the Union” speech.
The Japanese currency added to yesterday’s losses when it weakened 0.7% and it softened 0.6% in Asian trading today. The US dollar rose to a session high of 103.18 yen, marking a fresh one-week high.
The diverging monetary policies of the Bank of Japan and the Federal Reserve is another main driver behind the dollar’s strength against the yen. The Fed is moving closer to hiking rates while the BoJ as well as other major central banks are easing.
Meanwhile, data out of Japan today showed the initial estimate on the July industrial production figure was revised lower. There was a decline of 0.4% month-on-month in July after rising 2.3% in June. Economists estimated zero growth following the preliminary estimate made at the end of August. The soft data impacted the yen further.
There are no major US data releases today and no Fed speakers due to the blackout period so the dollar is expected to hold onto gains.
Sterling consolidated losses against the dollar after a sharp tumble yesterday on soft UK inflation data. The pound traded to a two-week low of $1.3165 in Asian trading. The main risk for the pound will be UK jobs data later today.
The euro recovered some losses against the dollar after yesterday’s tumble to $1.1203 and climbed to a session high of $1.1226.
The Australian dollar posted a modest rebound after sliding yesterday and was up 0.2% at $0.7485. Data out of Australia today had little impact on the currency. Westpac’s consumer confidence index for September rose 0.3% in September to 101.4, following a 2% increase the prior month.
Gold, which is sensitive to monetary policy expectations, was flat around $1,320, after having fallen for five consecutive days to Tuesday.
WTI oil futures moved off yesterday’s lows when prices fell below $45 a barrel, and gained 0.5% to $45.10. Oil prices weakened this week after the International Energy Agency revised its outlook for supply and said it expects a glut persisting into 2017. The EIA crude oil inventory report is due later today.
Other data to focus on later today include the UK employment report as well as European industrial production data. Focus will also be on European Commission President Jean Claude Juncker who will address the EU parliament later today and will give the “State of the Union” speech.