Forex News: Yen Rises Amid BoJ Rate Hike Speculation, Risk-off

Yen Rises Amid BoJ Rate Hike Speculation, Risk-off Mood

(RTTNews) - The Japanese yen strengthened against other major currencies in the Asian session on Friday, amid increasing expectations of a BoJ rate hike and risk aversion that supported the gain of JPY.

Japan's household spending dropped precipitously in December, according to data released earlier today. This highlighted the negative impact of rising prices on consumer spending and supported predictions of an early rate hike by the Bank of Japan.

Data from the Ministry of Internal Affairs and Communications showed that the average of household spending in Japan was down 2.9 percent on month in December, coming in at 351,522 yen. That missed forecasts for a fall of 1.3 percent following the 6.2 percent jump in November.

On an annual basis, household spending slipped 2.6 percent - again shy of expectations for a dip of 0.5 percent following the 2.9 percent increase in the previous month.

The JPY is also supported by the potential for a concerted US-Japan intervention. However, the JPY may be capped ahead of the February 8 snap lower house election due to worries about Japan's economic status and political unpredictability.

Asian stock markets traded lower, hurt by continued weakness in technology stocks which mirror their peers on the tech-heavy Nasdaq amid concerns about valuations and the impact of artificial intelligence.

Uncertainty about geopolitical and trade conflicts is also weighing on market sentiment.

In the Asian trading today, the yen rose to a 2-day high of 184.36 against the euro and a 4-day high of 211.61 against the pound, from yesterday's closing quotes of 184.95 and 212.45, respectively. If the yen extends its uptrend, it is likely to find resistance around 182.00 against the euro and 209.00 against the pound.

Against the U.S. dollar and the Swiss franc, the yen edged up to 156.53 and 201.37 from Thursday's closing quotes of 157.04 and 201.76, respectively. The yen may test resistance near 152.00 against the greenback and 198.00 against the franc.

Looking ahead, Swiss unemployment rate for January and U.K. BBA mortgage rate data for January are due to be released in the European session.

In the New York session, Canada employment data for January, U.S. University of Michigan's consumer sentiment for February, U.S. Baker Hughes oil rig count data and U.S. consumer credit data for December are slated for release.

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