Japanese Yen Strengthens Against Majors




The Japanese yen rallied across the board on Thursday in Asia as dismal third quarter GDP reports from U.S. and New Zealand along with persisting eurozone debt concerns propelled traders to seek safe-haven assets.

Asian stock markets are trading mixed with investors treading cautiously despite a positive lead from Wall Street where stocks edged higher overnight.

With investors mostly staying on the sidelines ahead of year-end vacation, movements are quite choppy in most of the markets in the region. A lack of prominent triggers is also contributing to the subdued trend.

South Korea's Kospi slipped 0.14% and China's Shanghai composite dropped 0.54%. At the same time, Taiwan's weighted average advanced 0.56%, Australia's All ordinaries index jumped 0.55% and New Zealand's NZX-50 rose 0.11%.

The Japanese stock markets are closed today in honor of the emperor's birthday.

The U.S. gross domestic product increased at an annual rate of 2.6 percent in the third quarter compared to the previously reported 2.5 percent growth. Economists had been expecting the pace of growth to be upwardly revised to about 2.8 percent.

The yen appreciated almost 0.6 percent to reach a 9-day high of 83.08 against the US dollar by 10:45 pm ET from Wednesday's North American session close of 83.53. On the upside, the Japanese currency may find target around the 82.80 level.
Against the euro, the yen advanced to a new 3-week high of 108.93 at this time and this may be compared to yesterday's close of 109.47. If the yen strengthens further, 108.35 is seen as the next resistance level. The euro-yen pair is presently trading at 109.03.

The euro has been in a descending track after the ratings agencies Moody's put Portugal and Fitch Ratings placed Greece on review for a possible downgrade.

Moody's said this week that Portugal's ratings could be lowered by a "notch or two" if the country's debt affordability deteriorates or the economic outlook worsens due to austerity measures.

The move came after Spain and Belgium were warned of possible rating cuts, while the Irish Republic's credit rating was slashed by five notches by Moody's.

The yen advanced to an 8-week high of 128.09 against the pound around 10:45 pm ET, compared to yesterday's close of 128.59. The pound-yen pair is presently worth 128.26 with 127.70 seen as the next likely target level.

The yen appreciated by 0.7 percent to reach as high as 87.39 against the Swiss franc on Thursday morning in Asia from yesterday's fresh multi-month low of 87.98. On the upside, 87.30 is seen as the next likely target level for the yen in near-term. The franc-yen pair that was worth 87.81 at Wednesday's North American close is currently quoted at 87.40.
The yen climbed to a 2-day high of 83.19 against the Australian dollar around 10:45 pm ET and the pair moved sideways thereafter. The aussie-yen pair that ended yesterday's deals at 83.48 is presently quoted at 83.28. On the upside, the Japanese currency may find target around the 82.70 level.

The Japanese yen climbed to a fresh 7-week high of 61.76 against the NZ dollar by this time and this may be compared to Wednesday's North American session close of 61.88. If the yen strengthens further, it may test resistance around the 61.50 level.

The New Zealand dollar declined after a report showed that the nation's GDP was minus 0.2 percent compared to the preceding quarter. For the full year to Q3, GDP growth was 1.5 percent. Both results were below analysts' estimates of 0.2 percent quarterly expansion and 1.9 percent annual growth.

The yen reached as high as 82.07 against the Canadian dollar before holding steady around 10:45 pm ET. The loonie-yen pair that closed yesterday's deals at 82.49 is presently quoted at 82.16.

Looking ahead, French consumer spending and PPI-both for November and the UK services index for October are expected in the upcoming European session.
Turning to the U.S., weekly jobless claims for the week ended December 18, University of Michigan's final report on consumer sentiment for December and new home sales for November are likely to be in focus in the North American session along with data on durable goods orders and personal income and spending.

Canada's Gross Domestic Product for October is also on tap in the New York session.