Japanese Yen Weakened | Dow Jones Analysis

Jarratt Davis

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Japanese Yen weakened against major rivals in Asia trade Thursday, with risk sentiment improving on relatively solid Chinese economic data and robust stock-market performance, prompting selling of the perceived safety of the Japanese currency - claims Dow Jones.

According to this particular analysis the U.S. dollar was at Y120.25 yen around 0450 GMT from Y119.88 late Wednesday in New York, erasing much of its overnight losses on a disappointing Chicago purchasing managers index that pulled the U.S. currency down to Y119.55. The euro edged up to Y134.03 from Y134.00, while the pound gained to Y181.95 from Y181.35.

"Despite caution ahead of the release, China data turned out to remain steady. That's giving a sense of safety to the market," said Kenji Yoshii, a foreign-exchange strategist at Mizuho Securities.

China's official manufacturing purchasing managers index rose to 49.8 in September from 49.7 the previous month, with the latest monthly figure beating the median 49.7 forecast from a Wall Street Journal poll of nine economists.

The Nikkei Stock Average was up 2.4% midday at 17795.96 after gains in U.S. stocks overnight, on track to close higher for the second straight session. The benchmark lost more than 5% earlier in the week and fell to as low as 16901.49 Tuesday.

Risk-sensitive currencies also rallied on China data, with the Australian dollar rising to Y84.88 from Y84.12. The Australian dollar also gained to $0.7058 from $0.7017.

The U.S. dollar weakened to as low as Y119.77 early in the morning session on the Bank of Japan's quarterly tankan business sentiment survey, but later surpassed the Y120-threshold on expectations the BOJ will ease monetary policy during its October meetings.

The tankan survey's main index measuring the mood among big manufacturers about present business conditions fell to plus 12 from plus 15 in June despite record-high profits. The result marked the first deterioration since December and was worse than the plus 13 expected by economists polled by The Wall Street Journal and Nikkei.

The U.S. currency was stronger against the euro, which declined to $1.1147 midday from $1.1177 late Wednesday. The euro was tracking overnight weakness that followed the eurozone's consumer prices in September, which fell year-over-year for the first time since the European Central Bank launched its massive asset-purchase program in March.

The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.06% at 88.82.

Coming up during London session we have Manufacturing PMI out of the UK, followed by U.S. Weekly Jobless Claims, and U.S. ISM Manufacturing PMI later after the NY open. Take a look at my weekly news events overview here to learn more about these particular risk events.

P.S - If you want to learn more about how I trade, check out the link below

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