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Forex - Yen gains in Asia as markets eye policy moves

Published 04/28/2016, 09:55 PM
Updated 04/28/2016, 09:59 PM
Yen gains in Asia
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Investing.com - The yen gained on Friday in Asia as investors continued to react to a surprise Bank of Japan blow on avoiding additional stimulus at this week's policy meeting, with investors now turning attention to Greece and an ongoing review of its economic reform program.

USD/JPY traded at 107.35, down 0.70%, while AUD/USD changed hands at 0.7642, up 0.21%, after data. EUR/USD traded at 1.1383, up 0.27%.

In Australia, housing credit data rose 0.5% in March, unchanged from the previous month, while first quarter producer prices fell 0.2%, compared with a 0.2% gain seen quarter-on-quarter. As well, private sector credit for March gained 0.4%, compared with a 0.6% month-on-month rise seen.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.33% to 93.42.

Overnight, U.S. Treasury Secretary Jack Lew released a summary on Thursday of his phone conversation on Greece's economic reform efforts with Prime Minister Alexis Tsipras.

"Secretary Lew and Prime Minister Tsipras discussed the importance of Greece, the IMF, and European institutions constructively working together to conclude the first review of Greece's economic reform program and find a sustainable path forward in a timely manner. The Secretary underscored the importance of Europe following through on its commitment to put Greece's debt on a sustainable path through meaningful debt relief, adding that all parties need to be flexible to successfully conclude the negotiations."

On Thursday, the dollar pared losses against the other major currencies after the release of mixed U.S. economic reports, although the Federal Reserve’s most recent policy decision continued to weigh.

The Bureau of Economic Analysis said that U.S. economic growth slowed to an annual rate of 0.5%, from the 1.4% expansion registered in the fourth quarter of 2015.
That was the slowest pace of growth since the first quarter of 2014 and missed consensus expectations for a 0.7% increase. At the same time, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending April 23 decreased by 9,000 to a seasonally adjusted 257,000 from the previous week’s revised total of 248,000.

Analysts had expected jobless claims to rise by 12,000 to 260,000 last week.

The data came a day after the Fed left interest rates unchanged close to zero on Wednesday and offered little guidance on future rate hikes. On the other hand, the yen remained broadly supported after the Bank of Japan kept the deposit rate at minus 0.1% and its asset purchases at ¥80 trillion per year. It also pushed back the expected data for reaching its 2% inflation target.

Ahead of the meeting expectations had been building for more monetary stimulus measures.

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