Yen Falls After BoJ's Uchida Says No Rate Hikes If Markets Are Volatile
August 07 2024 - 12:35AM
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The Japanese yen weakened against other major currencies in the
Asian session on Wednesday, after Bank of Japan Deputy Governor
Shinichi Uchida said that the central bank won't raise the
benchmark interest rate if financial markets are unstable.
Speaking to business leaders in the northern Japanese city of
Hakodate, the BoJ Uchida said the market moves are intensely
volatile in the past week and could "obviously" change the BOJ's
rate hike path if it affects the central bank's economic and price
projections and the likelihood of Japan durably achieving its 2%
inflation target.
"As we're seeing sharp volatility in domestic and overseas
financial markets, it's necessary to maintain current levels of
monetary easing for the time being," Uchida said.
"We won't raise interest rates when financial markets are
unstable," he said.
The BOJ raised its interest rate last week and the U.S. Federal
Reserve signaled rate cuts in September.
The Asian stock markets traded higher today, as investors across
most markets are picking up stocks at a bargain after the recent
strong sell-off amid fears about the world's largest economy
slipping into recession.
In the Asian trading today, the yen fell to a 6-day low of
172.18 against the Swiss franc and a 2-day low of 188.07 against
the pound, from yesterday's closing quotes of 169.43 and 183.13,
respectively. If the yen extends its downtrend, it is likely to
find support around 177.00 against the franc and 196.00 against the
pound.
Against the euro and the U.S. dollar, the yen dropped to 5-day
lows of 161.44 and 147.90 from Tuesday's closing quotes of 157.72
and 144.30, respectively. The yen may test support near 169.00
against the euro and 156.00 against the greenback.
Looking ahead, Canada Ivey PMI for July, U.S. MBA weekly
mortgage approvals data, used car prices data for July, consumer
credit change for July and U.S. EIA crude oil data are slated for
release in the New York session.
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