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Forex - EUR/JPY extends gains, boosted by Trichet remarks

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Forex Pros - The euro extended gains against the yen on Thursday, advancing to a fresh daily high after European Central Bank President Jean-Claude Trichet said Europe should consider strengthening central control of economic policy.

EUR/JPY hit 117.14 during European afternoon trade, the daily high; the pair subsequently consolidated at 116.84, surging 0.73%.

The pair was likely to find support at 114.67, the low of May 27 and resistance at 117.78, the high of May 31 and a three-week high.

Earlier in the day, Trichet said Europe should consider strengthening central control of economic policy if efforts to deal with its debt crisis do not deliver results.

"As a first stage, it is justified to provide financial assistance in the context of a strong adjustment program," Trichet said. "But if a country is still not delivering, I think all would agree that the second stage has to be different.

European Union policymakers are hammering out a new aid package for Greece that is expected to include new loans, fresh austerity commitments and a stepped-up privatization program, potentially supervised from outside.

The euro was also sharply higher against the Swiss franc, with EUR/CHF jumping 1.09% to hit 1.2196.

Also Thursday, Japan's Prime Minister Naoto Kan survived a no-confidence vote by offering to resign, amid discontent over the government's handling of the March earthquake and tsunami that precipitated the worst nuclear disaster in 25 years.

Discord in the ruling party has hampered Kan's efforts to deal with a stagnant economy and heightened concerns over the government's ability to reign in the nation's debt burden.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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