Yen holds near seven year low

Tuesday, November 18, 2014

The Japanese yen held near a seven year low against the dollar during overnight trading as speculation that Prime Minister Shinzo Abe would announce a delay in the planned sales tax increase and a call for an early election. The currency held firm above 116.50 finding good support after touching just above 117.00 early on yesterday against the dollar. Having weakened over 11.0% year-to-date we could see further downward pressure as favourable economic conditions in the US prompt a move out of the yen and into the greenback. The speculation prompted over a 2.0% rally in both the Nikkei and TOPIX overnight, reversing Monday’s weaker start to the week. 

Asian equities outside of Japan experienced some slight selling pressure last night as investors continued to take profits amid slowing FDI and a rapidly cooling property market. Both mainland Chinese and Hong Kong listed shares slipped modestly lower after foreign direct investment growth slowed to 1.3% y/y in October from 1.9% y/y the previous month. Adding further pressure on markets were property price data for October which indicated that the price of new residential apartments fell in 67 out of 70 major Chinese cities, an acceleration from the previous month’s deceleration in 58 out of 70 major cities. The NBS data dampened market sentiment and selling pressure could continue throughout the week ahead of the release of the FOMC meeting minutes tomorrow and HSBC’s flash manufacturing PMI reading for November due out on Thursday.

Spot gold prices struggled to gain significant ground yesterday after Friday’s rally added almost 2.3% on strong physical demand. However, activity this morning has seen the yellow metal find firm support around yesterday’s close with prices currently stable above $1,195/oz as gold looks to target $1,200/oz.

JPY holds at seven year low against the dollar

JPY Curncy Japanese Yen Spot 2014 11 18 07 59 47

Gold prices head towards $1,200/oz

XAU Curncy Gold Spot Oz 2014 11 18 07 59 31

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All times UK Local Time


Topics: US Fed, Gold, JPY
More from: Kash Kamal