Home Forex Market News Asian Session – Yen slides ahead of Bank of Japan, US dollar...

Asian Session – Yen slides ahead of Bank of Japan, US dollar strong

The Japanese yen slipped to its lowest in 8 months against the dollar, as broad strength for the US currency and speculation that the Government Pension Fund would invest more in stocks, helped the Japanese stock market.  Dollar / yen climbed to 104.85, eyeing the 105 level and the 105.44 high for the year which was struck back in January.

Euro / dollar was also under pressure but its drop was much more contained.  The pair made a new 12-month low of 1.3115 and was trading around 1.3120.  Overall the euro managed to resist the dollar’s advance for now, as it was already nursing substantial losses from the previous week.

The aussie slipped to as low as 0.9249 before rebounding to 0.9285.  The Reserve Bank of Australia kept its key interest rate unchanged at 2.50% at the end of its meeting today.  In the accompanying statement by the Governor, the currency was blamed for being too high and for preventing the rebalancing of the economy away from the mining sector.  The economy had plenty of spare capacity according to the statement, as the unemployment rate was at the relatively high level of 6.4%.  This means that interest rates are unlikely to change in Australia for the foreseeable future.

Looking ahead to the remainder of the day, the UK construction sector PMI for August will be looked at closely after yesterday’s manufacturing PMI missed expectations.  The United States returns from the Labor Day holiday as the ISM manufacturing PMI business survey will be announced.  The previous month’s number at 57.1 was the highest since April 2011 and analysts were expecting it to remain near those highs at 57.0.

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