The Japanese yen rallied against major currencies, barring its safe-haven peers the dollar and the Swiss franc, as traders dump the high-yielding currencies and seek safe-haven assets following Friday’s dismal US jobs data and lingering concerns about euro zone debt problems.
The yen is considered as the one of the safe haven currency because of the nation’s very low interest rate. The yen tends to gain in terms of financial turmoil and vice-versa.
A report from the U.S. Labor Department showed on Friday the world’s largest economy failed to add any new jobs in August versus expectations for an increase in employment by about 60,000 jobs.
At the same time, the unemployment rate held at 9.1 percent, unchanged and in line with estimates. The lack of job growth during the month came as a modest increase in private sector employment was offset by another drop in government jobs.
Reports suggested that German Chancellor Angela Merkel’s ruling party has lost in local elections on Sunday. Merkel is already facing criticism at home over her handling of the euro-zone debt crisis and Germany’s slowing economy.
In economic news from Japan, service sector activity contracted for a seventh consecutive month in August, latest survey results from Markit Economics showed. The headline business activity index fell to 44.3 in August from 45.3 in July. The latest reading is the lowest in three months. An index score below 50 suggests contraction of the sector.
The yen extended its 1-week winning streak and touched nearly a 4-week high of 108.15 against the euro around 10:20 am ET. If the yen gains a few more pips, it could settle its highest mark in nearly 6-months.
European Central Bank President Jean-Claude Trichet on Monday called for stronger governance in the euro area and fast execution of reforms agreed upon by member states in July. A stronger economic governance will provide early warning and automatic sanctions for nations that violate fiscal rules, Trichet told a conference in Paris.
The yen also jumped to more than a 3-week high of 123.55 against the pound around the same time and a move above its August 10th peak of 123.34 could set its strongest mark since March 17.
The Japanese currency also extended its uptrend versus the resource-linked currencies, hitting 10-day highs of 80.87 against the Australian dollar, 77.43 versus the Canadian dollar and 63.80 against the New Zealand dollar around 10:20 am ET. On the upside, the Japanese unit may find target levels at 80.20 against the aussie, 63.50 versus the kiwi and 77.20 against the loonie.
With the US and Canadian markets are closed today on account of a Labor day holiday, market focus is shifted to central banks’ decisions this week.
The Reserve Bank of Australia is set to announce its rate decision tomorrow, Banks of Japan and Canada will be on Wednesday and the Bank of England and the European Central Bank on Thursday.
bookmarked!!, I adore your blog site!
This post is priceless. How can I find out more?
You really make it seem very easy along with your presentation nevertheless i find this matter being really something
that I feel I might never understand. It seems too complicated and extremely
broad to me. I’m anticipating for your next post, I will try
to find the hang of this!
I’m gone to inform my little brother, that he should also pay a visit this website on regular basis to obtain updated from most recent gossip.
My brother suggested I might like this website.
He was totally right. This post truly made my
day. You cann’t imagine simply how much time I had spent for this information! Thanks!
Ahaa, its good discussion about this bit of writing at
this particular place at this weblog, I actually have read all
of that, so at this point me also commenting here.
Appreciating the persistence you put into your website and detailed information you provide.
It’s great to come across a blog every once in a while that isn’t the same
outdated rehashed information. Great read! I’ve saved your site and I’m
including your RSS feeds to my Google account.
Hello! Someone within my Facebook group shared this website around
therefore i came to look it over. I’m definitely loving the information. I’m bookmarking
and you will be tweeting this to my followers! Exceptional blog and excellent design.