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Forex - EUR/JPY firms against yen as Japan unveils stimulus program

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Investing.com - The euro rose against the yen on Friday after Japanese Prime Minister Shinzo Abe's government announced plans to spend JPY20 trillion to stimulate the economy.

In U.S. trading on Friday, EUR/JPY hit 119.11, up 1.07% and up from a low of 117.63 and off a high of 119.25.

The pair sought to test support at 117.63, the session low, and resistance at 119.79, the high from May 5, 2011.

In Japan earlier, Prime Minister Shinzo Abe's government said it was finalizing plans to roll out a JPY20 trillion stimulus package to jolt the economy and steer it away from deflationary decline.

The move comes fresh in the heels of a government request to the Bank of Japan to double the country's inflation target to 2%.

The events sent the yen weakening against most major currencies on Friday, especially the euro.

On Thursday, the European Central Bank voted unanimously to leave interest rates unchanged at 0.75%.

While most market participants were expecting the monetary authority to leave benchmark lending rates unchanged, not all expected unanimous support, while others were expecting more cautious language from ECB President Mario Draghi, who predicted recovery to gain steam later this year.

The euro, meanwhile, was up against the pound and up against the Canadian dollar, with EUR/GBP trading up 0.83% at 0.8276 and EUR/CAD trading up 0.66% at 1.3136.

The pound slumped against other currencies after government data revealed that U.K. manufacturing production fell unexpectedly in November, ticking down 0.03% after a 1.3% decline the previous month.

Analysts had expected manufacturing production to rise 0.5% in November.

In addition, industrial production in the U.K. rose 0.3% in November, less than the expected 0.8% increase, after a 0.9% contraction the previous month.

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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.


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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