Monday morning in Asia, the yen jumped to multi-week highs against its European, Swiss, Australian and New Zealand counterparts as a slide in Asian stocks boosted demand for the safe-haven Japanese currency. The yen also climbed to a 5-day high against the Canadian dollar.
Concerns over the U.S. banking sector following the disappointing results by JP Morgan Chase & Co. in the December quarter and the political uncertainty in Japan, triggered a fairly strong round of selling in the Japanese stock market and pushed the benchmark Nikkei 225 index down sharply into the red today.
The Nikkei, which dropped down to around 10,784 after opening more than 100 points down at 10,887.6, is currently down 201.07 points or 1.83% at 10,781.03.
Among other Asian markets, Australia’s S&P/ASX 200 index lost 0.3% and the broader All Ordinaries index fell 0.3%, New Zealand’s NZX 50 index slipped 0.3%, South Korea’s Kospi declined 0.6%, Hong Kong’s Hang Seng dropped 1.3% and China’s Shangai composite index fell 0.1%.
Looking ahead, Japan is scheduled to release final November numbers for industrial production and capacity utilization reports at 11:30 pm ET.
Analysts are expecting the output numbers to show little change from the preliminary figures released earlier this month. Production was said to gain 2.6 percent on month but shed 3.9 percent on year, while capacity utilization was up 0.2 percent on month.
The yen, which closed last week’s trading at 130.65 against the euro rose to a 4-week high of 130.10 during early Asian deals on Monday. The next upside target level for the yen is seen at 127.4.
The European currency fell before finance ministers from the 16 nations that use the euro meet today to discuss Greece’s public finances.
Greek debt slumped after the European Commission said last week there were “severe irregularities” in data the country used to calculate its deficit.
Greece presented the European Commission last week with a three-year budget plan that includes more than 10 billion euro ($14.4 billion) in deficit-reduction measures for this year to bring down Europe’s biggest budget shortfall.
The European Central Bank has issued a legal analysis of what would occur if a nation tried to leave the monetary union.
In early Asian trading on Monday, the yen climbed to a 3-week high of 88.23 against the Swiss franc. On the upside, 85.4 is seen as the next target level for the Japanese currency. At Friday’s close, the franc-yen pair was quoted at 88.51.
The yen strengthened to near a 3-week high of 66.56 against the NZ dollar and a 2-week high of 83.32 against the Aussie in early Asian deals on Monday. If the yen gains further, it may target 65.0 against the kiwi and 79.5 against the aussie. The aussie-yen and the kiwi-yen pairs were worth 83.88 and 67.13, respectively at Friday’s close.
During early Asian deals on Monday, the yen soared to a 5-day high of 88.02 against the Canadian dollar. This may be compared to last week’s close of 88.25. On the upside, 87.3 is seen as the next target level for the yen.
The yen was little changed against the currencies of US and UK in early Asian trading on Monday. At present, the yen is trading near last week’s close of 147.7 against the pound and 90.8 against the dollar.
In the European session, the Italian trade balance for November is due at 4:00 am ET.
The U.S. financial markets are closed on Monday for Martin Luther King, Jr. day.