The Japanese yen extended its gains against the other major currencies in the Asian session on Monday amid a rise in risk aversion following the left-wing Syriza party sweeping polls in the weekend snap elections, igniting worries that Greece may exit the eurozone.
Meanwhile, data released by the Ministry of Finance showed that Japan’s trade deficit came in at JPY 660.7 billion in December, less than the JPY 735.2 billion expected by economists. Exports climbed more than expected and imports also rose solidly.
Minutes of the Bank of Japan January monetary policy showed that majority of the members agreed that the drop in oil prices will affect the economy and inflation positively in the long-term, though it is expected to weigh on inflation in the short-term.
Meanwhile, Asian stocks also traded lower amid fears of a possible exit of Greece from the eurozone, after the anti-austerity Syriza party emerged victorious in the Greek snap elections. In addition, these reports have raised concerns that Greece could abandon its budget constraints, amid heightening fears of a Greece exit.
The Japanese benchmark Nikkei 225 index is currently down 0.61 percent or 107.25 points at 17,404.
Last Friday, the yen rose 2.04 percent against the euro, 0.73 percent against the pound, 1.78 percent against the Swiss franc and 0.63 percent against the U.S. dollar.
In the Asian trading today, the yen rose to nearly a 1-1/2-year high of 130.13 against the euro and nearly a 3-month high of 175.73 against the pound, from last Friday’s closing quotes of 131.89 and 176.51, respectively. If the yen extends its uptrend, it is likely to find resistance around 127.00 against the euro and 176.60 against the pound.
The yen, which ended Friday’s deals at 133.30 against the Swiss franc and 117.72 against the U.S. dollar appreciated to a 10-day high of 132.87 and a 4-day high of 117.25, respectively. The yen may test resistance near 114.40 against the Swiss franc and 115.75 against the U.S. dollar.
Against the Australia, the Canada and the New Zealand dollars, the yen strengthened to a 3-1/2-month high of 92.16, more than a 3-month high of 94.10 and a 3-month high of 86.83 from last week’s closing quotes of 93.08, 94.75 and 87.75, respectively. On the upside, 91.00 against the aussie, 93.50 against the loonie and 86.00 against the kiwi are seen as the next resistance levels for the yen.
Meanwhile, the euro dropped against the other major currencies in the Asian session on Monday, as the anti-austerity Syriza party emerged victorious in the Greek elections Sunday, but may fall shy of an absolute majority in the 300-seat parliament and need some outside support.
The euro fell to 1.1096 against the U.S. dollar for the first time since March, 2003. At last week’s close, the euro was trading at 1.1203 against the greenback. If the euro extends its downtrend, it is likely to find support around the 1.09 area.
Against the pound, the euro slipped to 7-year low of 0.7403 from Friday’s closing quote of 0.7473. On the downside, 0.73 is seen as the next support level for the euro.
The euro edged down to 0.9782 against the Swiss franc, from last week’s closing quote of 0.9857. The euro may test support near the 0.96 region.
Looking ahead, the German IFO business climate index for January and U.K. BBA mortgage approvals for December are due to be released in the European session.
At 9:00 am ET, Eurozone finance ministers hold a meeting to discuss a range of financial issues in Brussels.
The Australian and New Zealand markets are closed for the Australia Day and Auckland Anniversary holidays, respectively.