Investing.com - Earlier this week the U.S. dollar was found hovering near its highest levels against the Japanese yen since 2010, but the greenback is giving back some of those gains in Wednesday’s Asian session as traders appear concerned the Japanese currency has weakened too rapidly too quickly against some of its major rivals.
In Asian trading Wednesday, USD/JPY plunged 0.5% to 88.36. The pair was likely to find support at 86.84, the low from Jan. 8, and resistance at 89.64, Monday's high.
The yen has been under pressure for at least two months, since it became apparent that Shinzo Abe was a credible candidate to become Japan’s next prime minister and after he won that election in mid-December.
Abe has been overt in his attempts to get the Bank of Japan to engage in unlimited monetary easing and raise its inflation target to 2% from the current level of 1%. His rhetoric has had the desired effect of weakening the yen while boosting shares of Japanese exporters.
However, not all Japanese policymakers want to see the currency depreciate so rapidly. On Tuesday Japanese Economy Minister Akira Amari roiled currency markets by saying too much depreciation too soon could hamper Japan’s already fragile economy, the world’s third-largest.
A pair of economic reports out earlier today highlighted just fragile the Japanese economy is. Japan’s corporate goods price index rose more-than-expected last month, official data showed on Tuesday.
In a report, Bank of Japan said that Japan’s Corporate Goods Price Index rose to a seasonally adjusted annual rate of -0.6%, from -0.9% in the preceding month. Analysts had expected Japan’s Corporate Goods Price Index to rise to -0.7% last month.
Japan’s core machinery orders rose unexpectedly last month, official data showed on Tuesday.
In a report, Economic and Social Research Institute said that Japan’s Core Machinery Orders rose to 3.9%, from 2.6% in the preceding month. Analysts had expected Japan’s Core Machinery Orders to fall to 0.3% last month.
Elsewhere, EUR/JPY slipped 0.69% to 117.34 while AUD/JPY tumbled 0.52% to 93.31.
In Asian trading Wednesday, USD/JPY plunged 0.5% to 88.36. The pair was likely to find support at 86.84, the low from Jan. 8, and resistance at 89.64, Monday's high.
The yen has been under pressure for at least two months, since it became apparent that Shinzo Abe was a credible candidate to become Japan’s next prime minister and after he won that election in mid-December.
Abe has been overt in his attempts to get the Bank of Japan to engage in unlimited monetary easing and raise its inflation target to 2% from the current level of 1%. His rhetoric has had the desired effect of weakening the yen while boosting shares of Japanese exporters.
However, not all Japanese policymakers want to see the currency depreciate so rapidly. On Tuesday Japanese Economy Minister Akira Amari roiled currency markets by saying too much depreciation too soon could hamper Japan’s already fragile economy, the world’s third-largest.
A pair of economic reports out earlier today highlighted just fragile the Japanese economy is. Japan’s corporate goods price index rose more-than-expected last month, official data showed on Tuesday.
In a report, Bank of Japan said that Japan’s Corporate Goods Price Index rose to a seasonally adjusted annual rate of -0.6%, from -0.9% in the preceding month. Analysts had expected Japan’s Corporate Goods Price Index to rise to -0.7% last month.
Japan’s core machinery orders rose unexpectedly last month, official data showed on Tuesday.
In a report, Economic and Social Research Institute said that Japan’s Core Machinery Orders rose to 3.9%, from 2.6% in the preceding month. Analysts had expected Japan’s Core Machinery Orders to fall to 0.3% last month.
Elsewhere, EUR/JPY slipped 0.69% to 117.34 while AUD/JPY tumbled 0.52% to 93.31.