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Forex - EUR/JPY gains as Japan P.M. asks BoJ to tolerate more inflation

By: Investing.com
Posted: 1/9/2013 3:59:00 PM
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Investing.com - The euro rose against the yen on Wednesday, ignoring disappointing production data out of Germany, after Japanese Prime Minister Shinzo Abe asked the Bank of Japan to double an inflation target to 2%.

In U.S. trading on Wednesday, EUR/JPY hit 114.62, up 0.66% and up from a low of 113.56 and off a high of 115.03.

The pair sought to test support at 113.45, the low from Dec. 31, and resistance at 115.56, the high from Jan. 6.

In Japan earlier, Prime Minister Shinzo Abe informed Bank of Japan Governor Masaaki Shirakawa that he would like to see the country double its inflation goal to 2%, which while not a surprise due to Abe's repeated calls for looser policies, still sent the yen falling regardless on Wednesday.

Abe's comments weakened the Japanese currency against the euro despite disappointing data out of Germany that sent the single currency softening against the greenback.

German industrial production rose 0.2% in November, according to official data, missing market expectations for a 1.0% increase.

German industrial production fell 2.9% on year in November, in line with expectations.

On Tuesday, the German government reported that factory orders fell 1.8% in November, outpacing market expectations for a 1.4% decline thanks in part to slumping overseas demand for the country's goods and services.

Elsewhere, final data showed that the eurozone economy contracted 0.1% in the third quarter, in line with preliminary estimates as well as market expectations.

The euro, meanwhile, was up against the pound and down against the Canadian dollar, with EUR/GBP trading up 0.04% at 0.8151 and EUR/CAD trading down 0.11% at 1.2894.

On Thursday, the European Central Bank will announce its decision on benchmark interest rates and hold a post-policy meeting press conference to discuss the monetary policy decision.









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