Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Forex - Yen gains on trade surplus, Bank of Japan ahead

Published 11/18/2015, 07:07 PM
Updated 11/18/2015, 07:10 PM
Yen gains on solid trade data

Investing.com - The yen gained in Asia on Thursday as the the trade balance swung into positive territory and investors looked ahead to the Bank of Japan.

USD/JPY changed hands at 123.51, down 0.10%, while AUD/USD traded at 0.7120, up 0.15%.

In Japan, the trade balance widened to a surplus of ¥112 billion in October, the first positive result in seven months.

Imports fell 13.4% year-on-year, while exports declined 2.1%.

The Bank of Japan will release its latest monetary policy views at 0330 GMT followed by a 0630 GMT press conference by Governor Haruhiko Kuroda. The central bank is expected to hold policy steady on asset buying, but may highlight risks to meeting its 2% sustained inflation target.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.02% at 99.65.

Overnight, the dollar held steady at seven-month highs against the other major currencies on Tuesday, after the release of mixed U.S. housing sector data, as hopes that the Federal Reserve will raise interest rates at its meeting next month continued to support the greenback.

The minutes of the latest Federal Open Market Committee meeting showed Wednesday broad support for the decision to include a reference to the next meeting in the statement, though members generally agreed it was prudent to wait to raise rates until it had more information.

A trio of policymakers from the Federal Reserve sent further indications that the U.S. Central Bank will raise short-term interest rates when it convenes next at a meeting in mid-December.

Appearing on a panel alongside New York Fed president William Dudley and Cleveland Fed president Loretta Mester, Atlanta Fed president Dennis Lockhart indicated that disruptions in the global financial markets have subsided enough for the Fed to strongly consider a rate hike in December. The Fed's benchmark Federal Funds Rate has remained at its current level between zero and 0.25% for nearly seven years since December, 2008.

"I am comfortable with moving off zero soon, conditioned on no marked deterioration in economic conditions," Lockhart said at the Clearing House Payments System Risk Symposium in New York. "I believe it will soon be appropriate to begin a new policy phase."

Mester reiterated her views that conditions in the economy have improved enough to handle a modest rate increase. While the president of the Federal Reserve of Cleveland does not own a vote at the December meeting, she will regain one in the Fed's next cycle.

Dudley, meanwhile, noted that he does not expect to see any unpredictable market reactions when the Fed eventually decides to normalize policy since the potential move has been so well-documented in recent weeks. The New York Fed has a number of tools at its disposal to help adjust the Fed Funds Rate once the decision is made.

The CME Group's (O:O:O:CME) Fed Watch increased the probability of a December rate hike by eight points to 72% on Wednesday following the remarks.

The U.S. Commerce Department reported that housing starts dropped 11% to 1.060 million units last month from September’s total of 1.191 million units. Analysts had expected a decline of 3.9% to 1.160 million.

Meanwhile, the number of U.S. building permits issued rose 4.1% to 1.150 million units from September’s total of 1.105 million, broadly in line with market expectations

Demand for the dollar continued to be underpinned by expectations that the Fed will hike rates before the years end.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.