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Forex- Yen snaps out of doldrums, surges against the majors

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Investing.com - The Japanese yen snapped out of a recent funk against its major rivals in Asian trading Friday and was seen soaring against the group even after the Bank of Japan announced additional stimulus measures.

In Asian trading Friday, USD/JPY plunged 0.56 to 83.92. The pair was likely to find support at 83.61, Monday's low, and resistance at 84.62, Wednesday's high.

The greenback and the other majors had been gaining steam against the yen earlier this week as traders priced in Shinzo Abe's victory in last Sunday's Japanese elections. Abe's Liberal Democratic Party ran up a convincing majority in Japan's lower house of parliament, bolstering hopes that Abe has a mandate to force BoJ to weaken the yen.

After several days of losses, the yen snapped back on Friday. EUR/JPY plunged 0.77% to 110.91. The pair was likely to find support at 109.94, Monday's low, and resistance at 112.49, Wednesday's high.

Sterling is also seen noticeably lower against the yen with GBP/JPY lower by 0.65% to 136.48. After what feels like several weeks of considerable strength on the part of the Aussie dollar against the yen, traders appear to be saying enough is enough as AUD/JPY is lower by 87.75.

On Wednesday, a day BoJ announced an additional 10 trillion in asset buying, Japan's Chamber of Commerce and Industry told Abe he should aim for USD/JPY to be in the 85-90 area.

In addition to weakening the yen, Abe wants BoJ to engage in forced inflation, or reflation, because the Japanese economy has been grappling with the effects of deflation for nearly two decades.

Elsewhere, CAD/JPY slipped 0.63% to 84.90 while NZD/JPY plunged 0.87% to 69.77%.

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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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