Yen Broadly Higher but Under Pressure

By: Barbara Zigah

The Japanese Yen firmed broadly earlier today but analysts believe it could still be under some buying pressure as Japan’s fiscal year end approaches. As reported at 12:43 p.m. (JST) in Tokyo the USD/JPY pair was trading higher at 82.59 Yen off the session low, 82.54 Yen and slightly off the Tuesday peak of 83.38 Yen. The Yen’s broad advance was primarily driven by gains against the Australian Dollar, which weakened the most among the Yen’s major rivals, with the AUD/JPY trading at 85.65 Yen, a decline of 0.6%. The Aussie Dollar has been under broad pressure lately, on the back of news that China’s economy is slowing more than expected and the possibility of a “hard landing” now seen as a real worry.

The Australian Dollar also lost more ground against the U.S. Dollar, trading at $1.0367, a decline of 0.3% on the day, and well below Tuesday’s high of $1.0557. Analysts don’t foresee any improvement in the Australian currency unless and until there is some confirmation from the Chinese government that the economy there is not weakening to the extent that global markets believe; Chinese PMI data to be released on Sunday could affirm that.