Shutterstock photo
Markets

Forex - USD/JPY extends losses, hover close to post-war low

Shutterstock photo

Shutterstock photo

Forexpros - The U.S. dollar extended losses against the yen on Wednesday, hovering close to the pair's all-time low following U.S. data showing producer price inflation rose more-than-expected last month.

USD/JPY hit 76.40 during U.S. morning trade, the lowest since August 11; the pair subsequently consolidated at 76.42, shedding 0.49%.

The pair was likely to find support at 76.28, the low of August 1 and resistance at 77.09, the high of August 15.

The U.S. Bureau of Labor Statistics said earlier that producer price inflation rose by a seasonally adjusted 0.2% in July, after declining by 0.4% in June.

Analysts had expected PPI to rise 0.1% in July.

Year-over-year, the producer price index rose at an annualized rate of 7.2% in July, above expectations for a gain of 7.0%.

Core PPI, which excludes food and energy costs, rose by 0.4%, the largest monthly gain since January. Analysts had expected core PPI to rise by 0.2%.

With the yen continuing to strengthen against the greenback in recent days, traders speculated at what level Japanese officials will step in to the currency market to stem gains in the currency.

On Monday, Japanese Finance Minister Yoshihiko Noda sharpened his verbal warnings to markets, saying that he will continue to "closely watch the markets and take bold action if it becomes necessary."

Noda also warned that the yen's strength posed as a downside risk to the Japanese economic recovery.

Japan intervened to curb the yen's gains for the first time since March on August 4. In addition, the BOJ announced additional monetary easing to further bolster growth, pledging to buy more assets such as stocks and bonds.

Elsewhere, the yen down against the euro, with EUR/JPY adding 0.12% to hit 110.80.

The single currency found support amid speculation the European Central Bank was buying Italian and Spanish government debt, in an effort to ease pressure on the region's third and fourth largest economies.

Forex News

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.

Other Topics

ForEx

Latest Markets Videos