Forex Trading-Foreign exchange – Dollar turns lower against yen as traders take profits
Trading.com – The dollar switched lower from the yen on Wednesday, as traders cashed out profits following its rise to 2-week highs after Japan cautioned that it’s ready to intervene within the foreign currency market.
USD/JPY was lower .51% to 108.72, moving off Tuesday’s highs of 109.36.
The dollar increased from the yen in the last two sessions after Japanese Finance Minister Taro Aso stated Monday that financial government bodies are ready to intervene within the currencies market if excessive moves within the yen are sufficient to modify the country’s economy.
Forex – Dollar rises against yen as Japan warns of market intervention
ForexMay 10, 2016 11:07AM ET© Reuters. Dollar rises against yen as Japan reiterates intervention warningInvesting.com – The dollar rose against the yen on Tuesday after Japan’s finance minister warned that officials are prepared to intervene if the country’s currency continued to strengthen.
USD/JPY rose 0.66% to 109.05, the highest level since April 28 after ending the previous session with a gain of 0.94%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 94.08.
The dollar had fallen to 18-month lows of 105.05 against the yen last Tuesday after the Bank of Japan kept monetary policy unchanged, defying market expectations for additional easing.
Japanese Finance Minister Taro Aso said Monday that financial authorities are prepared to intervene in the currency market if excessive moves in the yen continued.
The yen initially showed little reaction to the comments amid the view that authorities are unlikely to take steps to weaken the currency in the absence of support for such a move.
Late last month the U.S. Treasury Department added Japan to a watch list of countries it is monitoring to gauge whether their foreign exchange policies provide an unfair trade advantage.
Aso said Monday the Treasury’s move to put Japan on a watch list “won’t constrain” Tokyo’s currency policy.
Speaking Tuesday, Aso reiterated that Tokyo will intervene in the currency market if “one-sided” moves in the yen persist.
Also Tuesday, Japan’s Economy Minister Nobuteru Ishihara said he was closely watching financial markets after the yen’s gains last week.
The yen was also weaker against the euro, with EUR/JPY advancing 0.79% to 124.25 after ending Monday’s session with gains of 0.92%.
The single currency edged higher against the dollar with EUR/USD easing up to 1.1394.
In the euro zone, data on Tuesday showed that German industrial output fell more than expected in March, but exports rose strongly.
German industrial production fell by 1.3% in March, the largest monthly decline since August 2014.
A separate report showed that Germany’s exports rose by a larger-than-forecast 1.9% in March while imports fell by 2.3%, widening the trade surplus to €23.6 billion.
However, many traders expect that Japan will avoid taking key to weaken the yen in front of a G7 meeting its is hosting later this month, even without the support for this type of move.
Late recently the U.S. Treasury Department added Japan to some watch listing of nations it’s monitoring to gauge whether their foreign currency guidelines offer an unfair trade advantage.
The Treasury noted the current dollar-yen market was “orderly” and reiterated all nations must follow G20 and G7 obligations on exchange rate guidelines, broadly seen as an demand Japan to limit foreign currency interventions.
Aso stated Monday the Treasury’s proceed to put Japan on the watch list “won’t constrain” Tokyo’s currency policy.
The yen had hit 18-month highs from the dollar a week ago following the Bank of Japan held removed from growing financial stimulus.
The euro seemed to be lower from the yen, with EUR/JPY lower .41% at 123.76, tugging from Tuesday’s one-and-a-half week peaks of 124.43.
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— DailyFX (@DailyFX) 11 de mayo de 2016
The euro pressed greater from the dollar, with EUR/USD rising .17% to at least one.1390.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major foreign currencies, slid .17% to 94.06
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