Forexpros - The Japanese yen extended gains against the U.S. dollar in mid-day Asian trade Friday, despite the lingering effects of the Bank of Japan's currency intervention. and a global downturn in stock markets.
In early Asian trade USD/JPY hit 79.34, the pair's highest since July 14; the pair subsequently consolidated at 78.62, falling 0.30%.
The pair was likely to find support at 76.31, Monday's low, and resistance at 79.34, the day's high.
Japan's Nikkei Shimbun daily reported that Thursday's intervention by the Bank of Japan to weaken the yen against its counterparts had cost the BOJ USD50 billion.
Currency analysts expected the BOJ move to offer only a short-term weakness in the yen in light of an overall bullish sentiment on the Japanese currency.
Japan's Finance Minister Yoshihiko Noda speaking in Tokyo Friday about the BOJ intervention said, "We intervened to restrain speculative and disorderly movements it wasn't targeted at a level."
"We must closely watch the currency market, but with the big drops in the Dow, I'd like to closely monitor the stock market today as well," Noda added.
The Nikkei 225 Index dropped 3.6% in early trade Friday with export and financial issues leading losses.
Approaching mid-day trading Thursday, the Japanese yen plummeted against the U.S. dollar, with USD/JPY spiking from 76.99 to 78.35 in a matter of minutes, prompting speculation that the Bank of Japan had intervened to weaken the Japanese currency.
Bank of Japan Gov. Masaaki Shirakawa later confirmed intervention on the part of the government saying that the central bank "strongly expects that the action taken by the Ministry of Finance in the foreign exchange market will contribute to stable price formation in the market."
Meanwhile the yen moved higher against both the euro and the British pound with EUR/JPY down 0.13% to hit 111.03, and GBP/JPY falling 0.18% to hit 127.98.
Market eyes were expected to focus on employment figures due out Friday by the U.S. Bureau of Labor Statistics.
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.
