27 Jul 2015
USD/JPY: Yen bulls in control amid China stocks slump
FXStreet (Mumbai) - The Japanese currency was heavily bid versus the US dollar in the early European trades, knocking-off USD/JPY to fresh eight-day lows near 123 handle. The major was offered as the markets favoured the safe-haven appeal in yen amid tumbling Chinese equities while broadly lower greenback also added to the downside.
USD/JPY drops to 8-day lows
Currently, the USD/JPY pair trades -0.33% lower at fresh session lows of 123.36, with eyes set on 123 handle. Falling Chinese stocks coupled with optimistic comments from Bank of Japan (BOJ) Deputy Governor Nakaso boosted the yen on Monday.
Poor industrial profits data from China once again fuelled concerns over China’s economy slowdown resulting in Shanghai stocks plummeting nearly 7% today. The slump in China stock extends for the second straight session spooking market sentiments.
While BOJ Nakaso said early today that he sees inflation target to be achieved by next year while expecting that exports and output will increase gradually. These comments lent a helping hand to the Japanese currency.
More so, downbeat US data released on Friday also contributes to the losses in the USD/JPY pair, weighing heavily on the greenback. US new home sales unexpectedly plummeted in June, falling 6.8% to 482,000 units, worse than the expected reading of 548,000 sales, and a 0.3% hike anticipated by markets.
Looking ahead, markets turn their attention towards the New York session with the key US durable goods data on cards which may set the tone for Wednesday’s FOMC statement.
USD/JPY Technical Levels
To the upside, the next resistance is located 123. 85 (July 26 High) levels and above which it could extend gains 124.12 (July 24 High) levels. To the downside immediate support might be located at 123.23 (July 15 Low) below that at 123 levels.
USD/JPY drops to 8-day lows
Currently, the USD/JPY pair trades -0.33% lower at fresh session lows of 123.36, with eyes set on 123 handle. Falling Chinese stocks coupled with optimistic comments from Bank of Japan (BOJ) Deputy Governor Nakaso boosted the yen on Monday.
Poor industrial profits data from China once again fuelled concerns over China’s economy slowdown resulting in Shanghai stocks plummeting nearly 7% today. The slump in China stock extends for the second straight session spooking market sentiments.
While BOJ Nakaso said early today that he sees inflation target to be achieved by next year while expecting that exports and output will increase gradually. These comments lent a helping hand to the Japanese currency.
More so, downbeat US data released on Friday also contributes to the losses in the USD/JPY pair, weighing heavily on the greenback. US new home sales unexpectedly plummeted in June, falling 6.8% to 482,000 units, worse than the expected reading of 548,000 sales, and a 0.3% hike anticipated by markets.
Looking ahead, markets turn their attention towards the New York session with the key US durable goods data on cards which may set the tone for Wednesday’s FOMC statement.
USD/JPY Technical Levels
To the upside, the next resistance is located 123. 85 (July 26 High) levels and above which it could extend gains 124.12 (July 24 High) levels. To the downside immediate support might be located at 123.23 (July 15 Low) below that at 123 levels.