Forex News: Yen Rises After Japan's Real Wages Unexpectedly Rise

Yen Rises After Japan's Real Wages Unexpectedly Rise

(RTTNews) - The Japanese yen strengthened against other major currencies in the Asian session on Thursday, after data showed that the Japan's real wages unexpectedly increased in July, signaling that the Bank of Japan is likely on the track for another rate hike this year.

Data from the labor ministry showed that the Japan's Labor Cash Earnings climbed by 3.6 percent annually in July, compared with a rise of 4.5 percent in June. Meanwhile, the economists had expected a rise of 3.1 percent.

Also, Japanese wages adjusted for inflation rose 0.4 percent from a year earlier in July - marking the second consecutive month of increase after falling for more than two years.

Japan's Nikkei 225 fell 1.5 percent, below the 36,900 level, with weakness in some index heavyweights and technology stocks.

After Wednesday's weak labor market data, U.S. reports on jobless claims, private sector employment and service sector activity may shed further light on the health of the world's largest economy today.

Investors also eagerly await the release of more closely watched monthly jobs report on Friday that could influence the Fed's plans for how it trims its benchmark interest rates.

Traders currently expect that the U.S. central bank will cut its benchmark rate by 1 percent by the end of 2024.

In the Asian trading today, the yen rose to nearly a 1-month high of 158.78 against the euro and a 1-month high of 143.31 against the U.S. dollar, from yesterday's closing quotes of 159.28 and 143.73, respectively. If the yen extends its uptrend, it is likely to find resistance around 155.00 against the euro and 140.00 against the greenback.

The yen advanced to nearly a 3-week high of 188.36 against the pound, from yesterday's closing value of 188.89. On the upside, 182.00 is seen as the next resistance level for the yen.

Against the Swiss franc and the New Zealand dollars, the yen climbed to near 3-week highs of 169.36 and 88.62 from Wednesday's closing quotes of 169.77 and 89.08, respectively. The next possible upside targets for the yen is seen around 165.00 against the franc and 82.00 against the kiwi.

Against the Australia and the Canadian dollars, the yen jumped to near 1-month highs of 96.23 and 106.09 from yesterday's closing quotes of 96.64 and 106.41, respectively. The yen is likely to be seen around 89.00 against the aussie and 101.00 against the loonie.

Looking ahead, U.K. construction PMI for August and Eurozone retail sales for July are due to be released in the European session.

In the New York session, U.S. weekly jobless claims data, U.S. and Canada PMI data for August and U.S. EIA crude oil data are slated for release.

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