On Thursday US dollar traded higher versus the Japanese currency, as Asian stock markets recorded gains today and that shorted demand for the yen.
USD/JPY was trading at 98.20 at 7:43 GMT, after it reached a session high at 98.39 earlier. Support was expected at June 25th low, 96.95, while resistance was to be encountered at June 24th high, 98.69.
Asian shares registered gains on Thursday after fears of a credit shrinkage in China were eased. Additionally, on Wednesday Fitch ratings agency reduced its outlook over Chinese economic growth in 2013 to 7.5% from 8.0% previously. This way Fitch projections met target levels, pursued by the Chinese government. The agency expected Chinas GDP in 2014 to have increased to 7.5% and to have slowed down to 7.0% in 2015. Additionally, it became clear that Chinese central bank has not provided or withdrawn funds in relation with operations on the foreign open markets in its efforts to reduce pressure, caused by liquidity tightening. As a result interest rates at the inter bank market decreased for fifth consecutive day, after touching record levels during the past week.
Today it was reported, that Japanese All Industries Activity Index rose by 0.4% in April on a monthly basis in line with expectations. Revised data during the preceding month showed a 0.2% increase. This index encompasses 11 industrial sectors of Japanese economy and is used as a premature indicator for development of countrys Gross Domestic Product.
Meanwhile, the greenback was supported by market expectations of FED reducing the scale of monthly bond purchases by this years end, despite the downward revision of US final Gross Domestic Product. On Wednesday the Commerce Department of the United States announced that US economy managed to expand by 1.8% during the first quarter of the year on annual basis, slowing down in comparison with the previous quarter, when GDP grew by 2.4%. Experts had projected an increase by 2.4%.
The yen lowered against the euro as well, as EUR/JPY pair advanced by 0.47% to 127.77.
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