Yen Trades Lower Amid Risk Appetite

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The Japanese yen traded lower against its major rivals in the Asian session on Monday, as Asian stock markets climbed following the record closing highs on Wall Street Friday after a weak U.S. jobs data increased odds of further U.S. stimulus.

The House of Representatives approved a budget proposal on Friday, setting the stage for passage of the President’s $1.9 trillion COVID-19 relief package.

House Speaker Nancy Pelosi said that she would push for rapid approval of the plan.

Investors cheered positive earnings reports, the drop in new coronavirus cases and progress in the rollout of vaccines.

Data from the Ministry of Finance showed that Japan had a current account surplus of 1,165.6 billion yen in December, up 113.9 percent on year. That beat expectations for a surplus of 1,040 billion yen following the 1,878.4 billion yen surplus in the previous month.

Exports were up 0.3 percent on year to 6,561.5 billion yen after sinking 3.4 percent in November. Imports fell an annual 13.5 percent to 5,596.4 billion yen after dropping 13.6 percent in the previous month.

Japan’s trade surplus was 965.1 billion yen, up from 616.1 billion yen a month earlier.

Data from the Bank of Japan showed that overall bank lending in Japan was up 6.1 percent on year in January, coming in at 578.083 trillion yen.

That’s down from 6.2 percent in December.

The yen slipped to 1-week lows of 127.07 against the euro and 117.30 against the franc, after rising to 126.74 and 116.98, respectively in early deals. The currency is likely to find support around 129.00 against the euro and 119.5 against the franc.

The yen weakened to near 1-year lows of 82.68 against the loonie and 144.93 against the pound, off its early highs of 82.48 and 144.40, respectively. The currency is seen finding support around 84.00 against the loonie and 147.00 against the pound.

Reversing from its prior highs of 80.75 against the aussie and 75.70 against the kiwi, the yen slipped to more than a 2-year low of 81.01 and near a 2-year low of 76.03, respectively. Next likely support for the yen is seen around 84.00 against the aussie and 78.00 against the kiwi.

The yen fell to 105.55 against the greenback, from a high of 105.31 hit at 5:00 pm ET. Should the yen slides further, 108.00 is possibly seen as its next support level.

Looking ahead, Eurozone Sentix investor sentiment index for February is due in the European session.


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