April 15, 2016
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December 13, 2012
Yen falters as Abe pressures BoJ on inflation
The Japanese yen fell against the U.S. dollar and most of the other major currencies in Monday’s Asian session after prime minister-elect Shinzo Abe continued to apply pressure on the Bank of Japan regarding the country’s inflation targets.
In Asian trading Monday, USD/JPY jumped 0.17% to 84.41. The pair is likely to find support at 83.85, Friday’s low and resistance at 84.60, Wednesday’s high after gaining 0.86% last week.
Just one week removed from victory in Japan’s most recent elections, Abe has already proven successful in getting BoJ in engage in more monetary easing aimed at weakening the yen. Last week, the central bank expanded the size of its asset-purchase program by JPY10 trillion to JPY101 trillion.
Abe is pressuring BoJ to target annual inflation of 2%. Abe has gone so far as to say he will attempt to revise a Japanese law guaranteeing the central bank’s independence if that inflation target is not met. BoJ Governor Masaaki Shirakawa indicated that the central bank’s inflation goal will be reviewed at its next policy meeting in January.
AUD/USD modestly lower on cliff concerns
The Australian dollar fell slightly against its U.S. rival in Monday’s Asian session as traders departed riskier assets on the back of lingering fiscal cliff concerns.
In Asian trading Monday, AUD/USD fell 0.03% to 1.0399. That is where the pair closed at in Friday’s U.S. session after earlier touching its lowest levels in nearly three weeks. The pair is likely to find support at 1.0375, the low from November 23 and resistance at 1.0485, Friday’s high.
Indicating that the Aussie dollar’s move against its U.s. counterpart are more beholden to fiscal cliff headlines than any other near-term issue, the former did not get a lift despite some positive news regarding Australia’s own budget.
Trade minister Craig Emerson said in a media interview that Australia could return to a budget surplus for fiscal 2014. Last week, Treasurer Wayne Swan said it was unlikely Australia would accomplish the goal of a fiscal 2013 surplus due to weakness in the country’s mining sector, which has adversely impacted tax revenue.
Emerson went so far as to not rule out the possibility of a 2012-2013 budget surplus, but those bullish comments were not enough to support the Aussie dollar against the greenback in Asian trading Monday.
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