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Asian session: The yen weakened
00:30 Australia Wage Price Index, q/q Quarter III +1.0% +0.8% +0.7%
00:30 Australia Wage Price Index, y/y Quarter III +3.7% +3.8% +3.7%
The yen weakened against all 16 major peers on speculation the Bank of Japan (8301) will act to rein in the currency’s strength as it hurts exporters’ earnings. The yen snapped a five-day advance versus the euro after Kyodo News reported the nation’s government will downgrade its monthly economic assessment, which is due Nov. 16, and as a rally in stocks curbed demand for safer assets. Kyodo reported the government will cut its economic assessment for a fourth consecutive month, citing people close to the matter. Data this week showed the nation’s gross domestic product contracted in the third quarter by the most since last year’s earthquake as exports slumped and consumer spending slid. The BOJ increased its asset-purchase program by 11 trillion yen ($138 billion) to 66 trillion yen on Oct. 30, saying the central bank and the government will make “utmost” efforts to overcome deflation. Governor Masaaki Shirakawa and his board next meet on Nov. 19-20.
The euro rebounded from the lowest level in two months as a technical indicator signaled its recent decline may have been too rapid. The 14-day relative strength index for the euro versus the dollar fell to 33.4 yesterday, near the 30 level that some traders see as a sign that an asset price may reverse course. A similar gauge for the single currency against the yen declined to 37.8.
Gains in the euro were limited before data today forecast to show industrial production fell in the currency bloc, adding to signs that the region’s debt crisis is hampering growth. Industrial output in the 17-member euro area declined 2 percent in September from August, when it increased 0.6 percent, according to the median estimate of economists in a Bloomberg News survey before the data release today.
EUR/USD: during the Asian session, the pair rose to yesterday's high.
GBP/USD: during the Asian session, the pair rose, departing from the previous day's low.
USD/JPY: during the Asian session, the pair rose to Y79.55.
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