Economic news
The yen slides against the dollar
The yen reached another low against most of its major counterparts, including the dollar, during the Asian session on Wednesday. The Japanese currency crossed the psychological level of 91 and was trading at 91.17 at the time of writing, down 0.2% from its opening price of 90.70.
According to some analysts, as the Bank of Japan is set to be firm in maintaining the easing monetary policy as long as needed, the yen is highly likely to remain weak for longer.
This stance is supported further by Japan’s deputy economy minister, whose comments last week that a dollar/yen level of 100 would not be a concern made investors see that the Japanese government is not to a close end of weakening the yen.
Some analysts comment that the dollar’s strength against the yen could be partly due to traders’ anticipation that more negative economic data may come out of Japan. The release of slightly better-than-expected retail trade figures – 0.4%, were still disappointing, compared to 1.2% for November.
As a weak yen is set to boost Japanese exports, some big multinational companies operating in Japan, Coach (NYSE: COH) and McDonald’s (NYSE: MCD), have already expressed their concerns that high currency volatility could be damaging for their profits.
Technical analysis
USD/JPY
The dollar was in the range of 90.45 – 90.80 JPY during yesterday’s trading session.
This morning the currency pair was trading at 90.82 – 90.90.
Should the dollar successfully overcome the resistance zone of 90.90 – 91.10, its aim will be reaching and testing the 91.45 – 91.65 zone. If successful, the upward trend will continue to 91.90 – 91.10. If it falls below the support zone of 90.70 – 90.50, its next support zone will be at 90.25 – 90.05. In case of a breakdown, the downward trend will continue to 89.80 – 89.60.
Source: dfmarkets.co.uk
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