The yen strengthened across the board on Thursday morning in Asia as a weaker-than-expected Australian trade surplus data prompted traders to seek safe-haven Japanese currency.
Australia’s trade surplus narrowed to a seasonally adjusted A$1.9 billion in July from A$3.4 billion in June, the Australian Bureau of Statistics said today. That is considerably lower than analyst forecasts for a A$3.1 billion surplus.
Exports fell 4% in July compared to the previous month to A$25.4 billion, while imports were up 2% to A$23.5 billion.
In economic news from Japan, the monetary base was up 5.4 percent to JPY 98.399 trillion on year in August, the Bank of Japan said today. That follows a 6.1 percent annual expansion in July.
Asian stocks gained as a pickup in manufacturing activity in both the U.S. and China recharged some hopes of a continued economic recovery.
As of 10:50 pm ET, Japan’s Nikkei average was up 1.22% or 108.70 points to 9035.72.
Among other markets in the Asia-pacific region, Australia’s All Ordinaries index was up 0.79%, the New Zealand’s NZX-50 were up 0.51 percent, Taiwan’s TWII rose 1.06 percent, South Korea’s KOSPI climbed 0.37% and China’s Shanghai Composite was up 0.95%.
The yen advanced to a 2-day high of 82.66 against the Swiss franc around 10:20 pm ET, compared to 83.16 hit late New York Wednesday. If the yen strengthens further, likely resistance level is seen at 82.30. The franc-yen pair that closed yesterday’s deals at 83.16 is presently quoted at 82.72.
The yen that finished Wednesday’s North American deals at 130.52 against the pound rose to as high as 129.86 before holding steady around 10:20 pm ET. On the upside, the yen may find target around the 129.80 level in near-term.
The Japanese currency climbed to as high as 107.59 against the euro before leveling off around 10:20 pm ET. The euro-yen pair, which closed yesterday’s deals at 108.17, is presently quoted at 107.68. If the yen gains further, 107.45 seen as the next likely target level.
Against the US dollar, the yen rose to 84.13 around 10:20 pm ET and the pair moved on hold thereafter. The greenback-yen pair that closed Wednesday’ North American deals at 84.45 is presently quoted at 84.19. On the upside, the Japanese currency may target the 84.0 resistance level.
The yen that tested yesterday’s multi-day lows against the New Zealand dollar at the beginning of Thursday’s Asian session reversed its course shortly. The kiwi-yen pair is presently worth near Wednesday’s close of 60.15. On the upside, the domestic unit may find target around the 59.40 level.
The yen also advanced to 76.25 against the Australian dollar and 79.82 against the Canadian dollar around 10:20 pm ET and both the pairs moved sideways thereafter. The yen that closed Wednesday’s New York deals at 77.0 against the aussie and 80.46 versus the loonie is presently quoted at 76.36 and 79.90, respectively.
Looking ahead, European Central Bank’s rate decision will be keenly watched by traders in the upcoming European session. Traders expect the ECB to retain its current rate at 1 percent. The rate announcement is due out at 7:45 am ET.
French ILO unemployment, Swiss GDP and retail sales, Italian PPI, UK’s Nationwide house prices and PMI, euro-zone GDP and PPI reports are expected to gather market attention ahead of the ECB rate decision.
Turning to the U.S., the factory goods orders and pending home sales – both for July, weekly jobless claims for the week ended August 28th and a report on second quarter non-farm productivity are due for release in the New York session.