Investing.com – Last week saw the U.S. dollar fall to a fresh record low against the yen, prompting Japanese officials to warn that they may intervene in the foreign exchange market to weaken the currency.
USD/JPY hit 75.65 on Thursday, the pair’s all-time low; the pair subsequently consolidated at 75.79 by close of trade on Friday, shedding 0.52% over the week.
The pair was likely to find short-term support at 75.65, Thursday’s low and the pair’s all-time low and resistance at 76.28, Thursday’s high.
The yen surged to a record high against the greenback, amid a broad dollar selloff after European leaders reached an agreement on a package of measures to contain the debt crisis in the euro zone on Thursday.
The anti-crisis measures included an agreement with banks to take a 50% loss on the face value of their Greek debt, enhancing the powers of the region’s bailout fund and recapitalizing European lenders.
Risk appetite was also boosted after official data showed that U.S. gross domestic product rose by 2.5% in the third quarter, the fastest rate of increase since the third quarter of 2010.
The reading nearly doubled growth of 1.3% recorded in the preceding quarter. Analysts had expected U.S. gross domestic product to rise 2.4% in the third quarter.
The yen’s gains came even after the Bank of Japan expanded its credit and asset-purchase programs to a total of JPY55 trillion in an attempt to weaken the persistently strong currency.
Japanese officials have warned repeatedly that they may act to curtail the appreciation of the yen, which is threatening Japan’s largely export driven economy.
Japan’s Finance Minister Jun Azumi said Thursday that he would not rule out any possible measure to weaken the yen and added that he had instructed finance ministry officials to "make preparations so that we can act in response to anything."
In the week ahead, investors will be focusing on the Federal Reserve’s policy meeting on Wednesday and Friday’s U.S. nonfarm payrolls data. Meanwhile, the BoJ is to publish the minutes of its most recent policy meeting.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 31
Japan is to release official data on manufacturing activity and housing starts.
The U.S is to produce a report on manufacturing activity in the Chicago area, an important indicator of economic health.
Tuesday, November 1
The BoJ is to publish the minutes of its October policy setting meeting. The minutes give a detailed insight into current economic conditions from the bank’s point of view. Japan is also to produce official data on average cash earnings. Later in the day, BOJ Governor Masaaki Shirakawa is to speak; his comments will be closely watched for any clues to the future direction of monetary policy.
Also Tuesday, the Institute of Supply Management is to produce a report on U.S. manufacturing activity, a leading indicator of economic health.
Wednesday, November 2
The U.S. is to release private sector data on non-farm payrolls that leads government data by two days as well as a government report on crude oil stockpiles. In addition, the Federal Reserve is to announce its benchmark interest rate. The bank’s post-policy meeting press conference will be closely watched for indications to the future possible direction of monetary policy.
Thursday, November 3
Markets in Japan are to remain closed for a national holiday.
The U.S. is to produce its weekly report on initial jobless claims as well as government data on factory orders. The U.S. is also to publish preliminary data on nonfarm productivity and labor costs, important inflationary indicators. In addition, the ISM is to release a report on service sector activity, a leading indicator of economic health.
Meanwhile, leaders from the G-20 group of industrialized nations are to hold talks to discuss a range of global economic topics, including the financial crisis in the euro zone, in Cannes.
Friday, November 4
The U.S. is to round up the week with its closely watched government report on nonfarm payrolls, in addition to official data on the unemployment rate and average hourly earnings.
Meanwhile, G-20 leaders are to meet for a second day in Cannes.
USD/JPY hit 75.65 on Thursday, the pair’s all-time low; the pair subsequently consolidated at 75.79 by close of trade on Friday, shedding 0.52% over the week.
The pair was likely to find short-term support at 75.65, Thursday’s low and the pair’s all-time low and resistance at 76.28, Thursday’s high.
The yen surged to a record high against the greenback, amid a broad dollar selloff after European leaders reached an agreement on a package of measures to contain the debt crisis in the euro zone on Thursday.
The anti-crisis measures included an agreement with banks to take a 50% loss on the face value of their Greek debt, enhancing the powers of the region’s bailout fund and recapitalizing European lenders.
Risk appetite was also boosted after official data showed that U.S. gross domestic product rose by 2.5% in the third quarter, the fastest rate of increase since the third quarter of 2010.
The reading nearly doubled growth of 1.3% recorded in the preceding quarter. Analysts had expected U.S. gross domestic product to rise 2.4% in the third quarter.
The yen’s gains came even after the Bank of Japan expanded its credit and asset-purchase programs to a total of JPY55 trillion in an attempt to weaken the persistently strong currency.
Japanese officials have warned repeatedly that they may act to curtail the appreciation of the yen, which is threatening Japan’s largely export driven economy.
Japan’s Finance Minister Jun Azumi said Thursday that he would not rule out any possible measure to weaken the yen and added that he had instructed finance ministry officials to "make preparations so that we can act in response to anything."
In the week ahead, investors will be focusing on the Federal Reserve’s policy meeting on Wednesday and Friday’s U.S. nonfarm payrolls data. Meanwhile, the BoJ is to publish the minutes of its most recent policy meeting.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 31
Japan is to release official data on manufacturing activity and housing starts.
The U.S is to produce a report on manufacturing activity in the Chicago area, an important indicator of economic health.
Tuesday, November 1
The BoJ is to publish the minutes of its October policy setting meeting. The minutes give a detailed insight into current economic conditions from the bank’s point of view. Japan is also to produce official data on average cash earnings. Later in the day, BOJ Governor Masaaki Shirakawa is to speak; his comments will be closely watched for any clues to the future direction of monetary policy.
Also Tuesday, the Institute of Supply Management is to produce a report on U.S. manufacturing activity, a leading indicator of economic health.
Wednesday, November 2
The U.S. is to release private sector data on non-farm payrolls that leads government data by two days as well as a government report on crude oil stockpiles. In addition, the Federal Reserve is to announce its benchmark interest rate. The bank’s post-policy meeting press conference will be closely watched for indications to the future possible direction of monetary policy.
Thursday, November 3
Markets in Japan are to remain closed for a national holiday.
The U.S. is to produce its weekly report on initial jobless claims as well as government data on factory orders. The U.S. is also to publish preliminary data on nonfarm productivity and labor costs, important inflationary indicators. In addition, the ISM is to release a report on service sector activity, a leading indicator of economic health.
Meanwhile, leaders from the G-20 group of industrialized nations are to hold talks to discuss a range of global economic topics, including the financial crisis in the euro zone, in Cannes.
Friday, November 4
The U.S. is to round up the week with its closely watched government report on nonfarm payrolls, in addition to official data on the unemployment rate and average hourly earnings.
Meanwhile, G-20 leaders are to meet for a second day in Cannes.