Forex - Japanese yen weakens slightly in choppy early Asian trade

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Investing.com - The yen weakened slightly in early Asian trade on Friday, carrying over choppy trade on the bullish monetary policy implications of a surprisingly strong weekly U.S. jobless claims report.

USD/JPY traded at 101.18, up 0.01%, in a narrow range of 101.15 - 101.19 in an Asian day light on data outside of the Bank of Japan monthly report.

The Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. last week fell by 21,000 to a seasonally adjusted 323,000, beating expectations for a decline of 9,000, which pushed the dollar higher that the Fed is moving closer to tapering bond purchases.

The Federal Reserve said in its October policy meeting minutes released this week that it might begin tapering the pace of its USD85 billion in monthly bond purchases soon if conditions in the labor market improve.

AUD/USD traded at 0.9236, up 0.02%, recovering from remarks late Thursday in Asia by Reserve Bank of Australia Governor Glenn Stevens that the central bank would intervene to lower the currency if warranted.

"Overall, in this episode so far, the bank has not been convinced that large-scale intervention clearly passed the test of effectiveness versus cost.
But that doesn't mean we will always eschew intervention. In fact we remain
open-minded on the issue," Stevens said.

"Our position has long been, and remains, that foreign exchange intervention can, judiciously used in the right circumstances, be effective and useful. It can't make up for weaknesses in other policy areas and to be effective it has to reinforce fundamentals, not work against them. Subject to those conditions, it remains part of the toolkit."

EUR/USD traded at 1.3481, up 0.01%.

Comments from European Central Bank President Mario Draghi also helped push the dollar in and out of negative territory In U.S. trading on Thursday.

Draghi downplayed recent media reports that the ECB was actively considering whether to cut deposit rates into negative territory, which bolstered the euro and softened the dollar.

Also in Europe, data released earlier revealed that manufacturing activity in the euro zone expanded in line with forecasts in November, but service-sector activity declined unexpectedly.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was at 81.02, up 0.01%.

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This article appears in: Investing , Forex and Currencies

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