The US dollar and the Japanese yen strengthened against their major opponents in early Asian trading on Tuesday as an initial slide in some of the Asian stocks prompted traders to seek safe-haven assets.
Japan’s Nikkei 225 Index opened lower today and is currently losing 6 points or 0.06% to 11,333.
In economic news, Japan is scheduled to release preliminary numbers for its leading and coincident indexes for February. The leading index is expected to show a score of 97.8 after coming in at 96.7 in January, while the coincident index is tipped to rise to 100.5 from 100.1 in the previous month.
Also, the Bank of Japan kicks off its two-day monetary policy meeting. Analysts are widely expecting the bank to keep interest rates on hold at the record low of 0.10 percent – although the bank may take other actions to combat deflation.
As of 8:05 pm ET Monday, the yen advanced to a 5-day high of 126.85 against the euro and a 4-day high of 88.60 against the Swiss franc from Monday’s New York session closing values of 127.28 and 88.88, respectively. On the upside, the yen may target resistance levels at 126.50 against the common currency and 88.50 versus the alpine unit.
The yen also edged sharply higher to 143.91 against the pound and 94.22 against the US dollar at this time from Monday’s North American session closing quotes of 144.40 and 94.38, respectively. If the yen gains further, it may find target levels at 143.8 against the pound and 94.10 against the greenback.
The Japanese unit also climbed to a 4-day high of 86.52 against the Australian dollar and 66.28 against the NZ dollar by 8:20 pm ET Monday, compared to Monday’s New York session closing values of 86.97 and 66.40, respectively. On the upside, the yen may find target levels at 66.10 against the kiwi and 85.10 versus the aussie.
Bouncing back from yesterday’s fresh 18 month low, the yen edged higher to 93.93 against the Canadian dollar by 8:20 pm ET Monday. The loonie-yen pair that closed yesterday’s deals at 94.22 is presently quoted at 94.05.
The US dollar also advanced against its major rivals, rising to a 6-day high of 1.3455 against the euro and a 4-day high of 1.0646 against the Swiss franc around 8:20 pm ET Monday. On the upside, the greenback may find resistance levels at 1.3410 against the single currency and 1.0710 against the Swiss franc. At Monday’s New York session close, the greenback was worth 1.0624 against the franc and 1.3485 against the euro.
The greenback that closed Monday’s New York session at 1.5297 against the pound advanced to as high as 1.5255 around 8:20 pm ET. If the US currency strengthens further, it may challenge resistance around the 1.5030 level.
Yesterday, the National Association of Realtors said its pending home sales index rose 8.2 percent to 97.6 in February from a downwardly revised 90.2 in January. The increase came as a surprise to economists, who had expected pending home sales to edge down by 1.0 percent.
Further, the Institute for Supply Management said its non-manufacturing index rose to 55.4 in March from 53.0 in February, with a reading above 50 indicating growth in the service sector. Economists had expected been expecting the index to edge up to a reading of 54.0. With the bigger than expected increase, the non-manufacturing index reached its highest reading since May of 2006.
Tuesday, the minutes of the Federal Open Market Committee’s March meeting are likely to garner attention along with comments from Minneapolis Federal Reserve Bank President Narayana Kocherlakota.