US dollar climbed to its highest point in seven weeks against the Japanese yen on Wednesday, after US President Barack Obama called for a pause in authorizing a military operation in Syria, while safe haven demand for the Japanese currency lost its appeal.
USD/JPY reached a session high at 100.60 at 4:40 GMT, the pairs highest point since July 22nd, after which consolidation followed at 100.45, gaining 0.05% for the day. Support was likely to be received at September 6th low, 98.55, while resistance was to be seen at July 22nd high, 100.65.
In a broadcast from the White House on Tuesday US President Obama said that he would prefer a peaceful solution to the Syrian conflict and that there were “encouraging signs” of diplomacy, which would put an end to the confrontation over Assad regime’s alleged use of chemical weapons. Barack Obama also added that he has asked the Congress to put on hold the vote on a military intervention.
“Obama is talking conciliation and a delay of any military strike, so that will be a positive for risk,” said Tony Allen, the global head of Group of 10 currency trading at Australia & New Zealand Banking Group Ltd. (ANZ) in Singapore, cited by Bloomberg. “We should see the yen weaken.”
Meanwhile, a report by Bank of Japan said that the corporate goods price index (CGPI) in the country increased by 2.4% in August on annual basis, following the 2.3% rise in the preceding month, which was a revision up from a 2.2% gain previously. Experts had anticipated that prices of corporate goods will gain 2.3%. The monthly performance of the index met expectations of a 0.3% climb in the month of August.
Additionally, Bank of Japan (BoJ) will make adjustments to its monetary policy as needed, according to board member Koji Ishida, as it was of great importance for the government to maintain fiscal trust. Japans central bank estimated that its current-account balance, measuring financial companies’ deposits at the BoJ, reached the record 91.4 trillion JPY on Wednesday, Bloomberg imparted.
Elsewhere, the yen was gaining against the euro, as EUR/JPY pair dropped 0.13% for the day to trade at 133.04 at 6:29 GMT. GBP/JPY cross was losing 0.08% to trade at 157.85 at 6:31 GMT. The yen has depreciated 16% during the past week, marking the worst performance among the 10 developed-nation currencies, tracked by Bloomberg Correlation Weighted Indexes.
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