Yen Slides Amid U.S. Debt Ceiling Hopes
The Japanese yen weakened against other major currencies in the
Asian session on Tuesday, as sentiment improved amid hopes that the
U.S. lawmakers will reach a debt ceiling deal soon and help the
nation avoid a default.
U.S. President Joe Biden and top Republican Kevin McCarthy have
called their latest talks on the debt ceiling productive, although
the talks over the weekend remained inconclusive.
The benchmark Nikkei 225 index moving above the 29,300 level to
33-year highs, also led to the slide of the safe-haven yen. The
benchmark Nikkei 225 Index is up 233.37 points or 0.75 percent at
31,320.19, after touching a high of 31,352.53 earlier.
In economic news, data from Jibun Bank showed that the
manufacturing sector in Japan continued to expand in May, and at a
faster pace, with a manufacturing PMI score of 50.8. That's up from
49.5 in April and it moves above the boom-or-bust line of 50 that
separates expansion from contraction. The survey also showed that
the services PMI rose from 55.4 in April to 56.3 in May.
In the Asian trading today, the yen plunged to a record low of
154.50 against the Swiss franc, from yesterday's closing value of
154.28. The yen may test support level near the 185.00 level.
The yen touched 150.05 against the euro, its lowest level to
near 3-weeks. At yesterday's close, the pair was trading at 149.82.
On the downside, 152.00 is seen as the next support level for the
The yen slid to 172.63 against the pound for the first time
since 3rd February 2016 and 138.87 against the U.S. dollar for the
first time since 30th November 2022, from yesterday's closing
quotes of 172.31 and 138.59, respectively. If the yen extends its
downtrend, it is likely to find support around 175.00 against the
pound and 142.00 against the greenback.
Against the Australia and Canadian dollars, the yen dropped to
4-day lows of 92.35 and 102.90 from yesterday's closing quotes of
92.20 and 102.62, respectively. The yen is seen finding support
around 94.00 against the aussie and 106.00 against the loonie.
The yen slipped to 87.31 against the NZ dollar, from yesterday's
closing value of 87.14. If it drops further, it may find support
around the 89.00 area.
Looking ahead, U.K. public sector finance data for April is due
to be released at 2:00 am ET.
In the European session, flash PMI reports for May from U.K. and
European countries are due.
At 3:15 am ET, ECB's Luis de Guindos, François Villeroy de
Galhau, Andrea Enria will deliver their speeches at a conference,
in Berlin, Germany.
The European Central Bank will publish the euro area current
account data for March at 4:00 am ET.
In the New York session, U.s. final building permits for April,
PMI reports for May, new home sales data for April and Canada PPI
and raw material prices data for April are slated for release.
At 9:00 am ET, Federal Reserve Bank of Dallas President Lorrie
Logan will give welcome remarks before the Technology-Enabled
Disruption Conference: Uncertainty and Prospects for Disruptive
Investments conference hosted by the Federal Reserve Bank of
Richmond, in Richmond, United States.
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