Forex News: Yen Falls Amid Japan Fiscal And Political Concerns

Yen Falls Amid Japan Fiscal And Political Concerns

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Wednesday, due to political unpredictability and fiscal worries.

The BoJ's hawkish stance and concerns about intervention may prevent the JPY bears from making new bets.

A major contributing element to the JPY's weakness amid political unpredictability ahead of the snap election on February 8 is worries about Japan's fiscal health under Prime Minister Sanae Takaichi's expansionary spending strategy.

In the meantime, traders are still on high alert due to the potential for a concerted US-Japan action to stop the decline of the JPY. In addition, the narrative of the Bank of Japan's (BoJ) gradual policy tightening may help prevent additional JPY losses.

In economic news, data from S&P Global showed that the services sector in Japan continued to expand in January, and at a faster pace, with a services PMI score of 53.7. That's up from 51.6 in December and beat last month's flash estimate of 53.4.

The survey also showed that the composite index jumped to 53.1 - up from 51.1 in December and from 52.8 in the estimate.

In the Asian trading today, the yen depreciated to a record low of 201.78 against the Swiss franc, from yesterday's closing value of 200.18. The yen may test support near the 202.00 region.

Against the euro, the pound and the U.S. dollar, the yen slid to near 2-week lows of 185.06, 214.53 and 156.39 from Tuesday's closing quotes of 184.08, 213.35 and 155.75, respectively. If the yen extends its downtrend, it is likely to find support around 187.00 against the euro, 215.00 against the pound and 159.00 against the greenback.

Against Australia, the New Zealand and the Canadian dollars, the yen dropped to a 36-year low of 109.95, a 7-month low of 94.51 and nearly a 2-week low of 114.71 from Tuesday's closing quotes of 109.38, 93.19 and 114.18, respectively. On the downside, 111.00 against the aussie, 101.00 against the kiwi and 116.00 against the loonie are seen as the next support levels for the yen.

Looking ahead, PMI reports from major European economies and U.K. for January and Eurozone CPI data for January are due to be released in the European session.

In the New York session, U.S. MBA mortgage approvals data, Canada and U.S. PMI data for January and U.S. EIA crude oil data are slated for release.

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