Japanese Yen Drops Amid Rising Risk Appetite

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The Japanese yen fell against its major counterparts in the Asian session on Friday amid rising risk appetite, as concerns about higher inflation eased after comments from Federal Reserve officials suggested that recent price pressures are transitory.

Most Asian stock markets rose, following the broadly positive cues overnight from Wall Street, as indications of a strengthening economy helped soothe some of the concerns about risks from inflation.

Federal Reserve Governor Christopher Waller said Thursday the factors putting upward pressure on inflation are temporary and the spike may last through 2022.

The Fed would not overreact to temporary overshoots of inflation, he added.

Data showing a drop in U.S. jobless claims to a 14-month low last week also helped tame inflation worries.

Investors await U.S. retail sales for April and the preliminary readings of the Michigan consumer sentiment index for May due later in the day for more direction.

The yen dropped to 154.01 against the pound, 132.50 against the euro and 109.66 against the greenback, after rising to 153.69 and 132.16 and a 2-day high of 109.35, respectively. The next likely support for the yen is seen around 156 against the pound, 135.00 against the euro and 112.00 against the greenback.

The yen depreciated to a 5-1/2-year low of 121.09 against the franc, from a high of 120.61 seen at 5:00 pm ET. If the yen continues its fall, 123.5 is possibly seen as its next support level.

The yen edged down to 78.71 against the kiwi and 84.76 against the aussie, from its previous highs of 78.46 and 84.52, respectively and held steady thereafter. The yen is poised to challenge support around 82.00 against the kiwi and 87.00 against the aussie.

The yen was trading lower at 90.11 versus the loonie, compared to Thursday’s close of 89.96. The yen is seen finding support around the 92.00 region.

Looking ahead, at 7:30 am ET, the European Central Bank publishes the account of the monetary policy meeting of the Governing Council held on April 21-22.

Canada wholesale sales and manufacturing sales for March, U.S. retail sales, export and import prices and industrial production, all for April, University of Michigan’s preliminary U.S. consumer sentiment index for May and business inventories data for March are scheduled for release in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com

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