Forex News: Yen Rises Amid Risk-off Mood

Yen Rises Amid Risk-off Mood

(RTTNews) - The Japanese yen strengthened against other major currencies in the European session on Friday amid increased risk-off mood, as heightened concerns about the U.S. credit woes weighed on markets.

Along with the fears about credit quality in the U.S. economy, heightened U.S.-China frictions and concerns about the U.S. government shutdown also led to the upturn of safe-haven JPY.

The U.S. government shutdown persists as the Senate rejected the House's spending patch for the tenth time.

The shutdown is now well into its third week with no signs that the Democratic minority in the U.S. Senate plans to back down from demands for health insurance subsidies being included.

Meanwhile, ahead of the Communist Party's fourth plenary session next week, China accused the U.S. of creating "unnecessary panic" over Beijing's controls on rare earth exports.

After reports emerged that the U.S. is considering imposing sweeping tariffs of up to 500 percent on Chinese imports over Russian oil trade, Beijing defended its oil imports from Russia as "legitimate and lawful" and warned that it would take "firm countermeasures" if the U.S. imposed unilateral sanctions affecting Beijing's interests.

In another significant development, a Bloomberg report suggested that the White House is preparing to ease tariffs on the U.S. auto industry, with an announcement in this regard expected later in the day.

In the European trading today, the yen rose to near 2-week highs of 174.82 against the euro, 200.69 against the pound and 149.38 against the U.S. dollar, from early lows of 175.97, 202.14 and 150.39, respectively. If the yen extends its uptrend, it is likely to find resistance around 171.00 against the euro, 196.00 against the pound and 146.00 against the greenback.

Against the Swiss franc, the yen edged up to 189.55 from an early low of 190.06. On the upside, 186.00 is seen as the next resistance level for the yen.

Looking ahead, U.S. Baker Hughes oil rig count data, U.S. building permits, housing starts, import and export prices, all for September, are slated for release in the New York session.

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