During the Asian session on Tuesday, the Japanese yen showed weakness against its major counterparts despite a slide in equities.
Tracking cues from Wall Street where stocks drifted lower overnight amid disappointing economic reports, Asian stock markets are mostly trading lower on Tuesday. Though some of the markets are off their early lows thanks to modest support, the mood remains bearish amid concerns about a slowdown in global economic growth.
Japan’s Nikkei 225 index is currently trading at 9,516.03 – down 190.50 points or 0.2 percent over its previous close.
European finance ministers on Monday approved a 78 billion euro financial aid package to Portugal to safeguard financial stability in the euro area and demanded that Greece step up privatization program before it gets any further help.
The yen hit a 5-day low of 81.24 against the U.S. currency in Asian trading and the pair is presently worth 81.18. On the downside, 83.00 is seen as the next target level for the yen. At yesterday’s close, the pair was quoted at 80.80.
Presently, the yen is trading at 131.53 against the pound and 63.39 against the kiwi, compared to Monday’s close of 130.84 and 63.01, respectively. The next downside target level for the yen is seen at 136.00 against the pound and 65.00 against the kiwi.
Against the Canadian dollar, the yen is now quoted at 83.29 and if the yen drops further, it may target the 87.00 level. The pair was worth 82.82 at yesterday’s close.
The yen is presently worth 91.76 against the franc and 114.93 against the euro, compared to yesterday’s close of 91.37 and 114.40, respectively. If the yen slides further, it may target 93.00 against the franc and 120.00 versus the euro.
Against the aussie, the yen edged down to 85.83 in Asian deals and the next downside target level for the yen is seen at 88.00. The aussie-yen pair closed Monday’s deals at 85.29.
In economic news, the Reserve Bank of Australia’s policy board says future interest rate hikes are likely to keep inflation under control.
Minutes of the board’s May 3 meeting were released this morning in Sydney. At that meeting, the central bank’s benchmark interest rate was left unchanged at 4.75 percent.
The minutes showed Australia’s first quarter inflation rate of 3.3 percent to have been higher than expected, and that core inflation is expected to be near the top of the RBA’s target range for the next couple of years
In the European session, U.K. CPI for April, DCLG house prices for March and the German ZEW economic sentiment indicator for May are slated for release.
The U.S. building permits, housing starts and industrial production – all for the month of April are due in the New York session.