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Forex - USD/JPY weakens in mid-day Asian trade

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Forexpros - The Japanese yen extended gains against the U.S. dollar in mid-day Asian trade Monday, as the greenback retreated following steep losses on Wall Street from Standard and Poor's downgrade to the U.S. credit rating.

In early Asian trade USD/JPY hit 77.86, the pair's highest since August 7; the pair subsequently consolidated at 77.28, falling 0.63%.

The pair was likely to find support at 77.01, last Thursday's low, and resistance at 78.47, yesterday's high.

Last week's currency market intervention by the Bank of Japan to the tune of a reported USD50 billion, gave a brief boost to the yen's counterparts. But the Japanese currency returned to gains following Standard and Poor's downgrade of its U.S. rating from AAA to AA plus.

Equity markets were hit hard by the news, with the Dow Industrial Average, Nasdaq Composite Index and S&P 500 posting their sixth worst loss ever in Monday U.S. trade.

Tokyo stocks followed suit in Tuesday morning Asian trade, with the Nikkei 225 Index stumbling 4%, and the broader based Topix Index falling 3.7%.

Market expectations were for an additional intervention by the BOJ if USD/JPY falls to 77.10, the trading point that precipitated last week's move by Japan's central bank.

Meanwhile the yen moved higher against both the euro and the British pound with EUR/JPY down 0.83% to hit 109.35, and GBP/JPY falling 1.03% to hit 125.58.

Investors were expected to turn attention to the U.S. Federal Reserve policy meeting on Tuesday, for possible signs of a change in the current 0.25% short-term interest rate.

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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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