[B]Market Review - 08/02/2013 [I]18:50GMT[/I][/B]
[B]Yen jumps on supportive comments from Japan’s finance minister[/B]
The Japanese yen rallied against dollar and euro on Friday as Japan Finance Minister Tara Aso said the recent decline of yen was too fast.
Although the greenback rebounded versus the yen from Thursday’s low at 93.08 to 93.74 in Australia, renewed broad-based cross buying of yen pressured the pair in Asia and price nose-dived to a low of 92.17 in European morning due to the yen-supportive comments from Japan Finance Minister Tara Aso who said ‘yen weakened more than intended from 78 yen to 90 yen against dollar’, however, the pair then swiftly recovered to 93.04 on short-covering. Later, the steep fall in eur/jpy cross sent the pair to 92.26 in New York morning before staging a recovery to 92.89.
The single currency traded narrowly above Thursday’s low at 1.3371 in Asia and then rose briefly to 1.3430 in European session, however, cross selling of euro versus other currencies pressured the pair below 1.3371 to 1.3361 in New York morning and then 1.3353 in U.S. afternoon.
Earlier in Europe, the single currency was supported due to the comments from German government spokesman who said ‘Germany feels currency rate should reflect economic fundamentals; Germany believes euro is not overvalued; recent euro moves only compensate for weakness during euro zone debt crisis.’
The British pound edged higher from 1.5706 in Asian morning and then rose in tandem with euro above Thursday’s high at 1.5768 to 1.5770 in European morning before retreating to 1.5742. Later, active cross buying of sterling versus euro pushed the pair higher to 1.5845 in New York morning before retreating.
In other news, Fitch affirmed Spain’s rating at BBB with negative outlook.Fitch said ‘Spain affirmation reflects expectation public debt will remain under 100% of GDP; Spain maintains some fiscal headroom, albeit significantly reduced.’ BoJ’s Governor Masaaki Shirakawa said ‘recent fx moves likely to underpin exports; Japan economy will head to moderate recovery towards middle of this year.’ Irish central bank governor said ‘bank debt deal absolutely very strong deal for Ireland, Europe; budgetary pressures remains regardless of deal, a lot of fiscal adjustment to be done.’
[B]Data to be released next week: [/B]
U.K. Lloyds employment, Australia Home loans, France industrial production, manuf. production on Monday. (Japan and China are closed due to market holiday.)
U.K. RICS house prices, Australia NAB business conditions, NAB business confidence, Japan Consumer confidence, Machinery orders, France current account, Swiss CPI, U.K. CPI, RPI, PPI input, PPI output, PPI core, U.S. Redbook retail sales, Fed budget on Tuesday. (China is closed due to market holiday.)
Australia W’pac consumer confi., Japan Domestic CGPI, EU Industrial prod’n, U.S. Import price index, Retail sales, Retail sales less auto, Business inventories on Wednesday. (China is closed due to market holiday.)
New Zealand ANZ consumer confidence, Japan GDP, GDP deflator, France GDP, EU GDP, U.S. Jobless claims on Thursday. (China is closed due to market holiday.)
Japan Industrial prod’n, Capacity utilisation, U.K. Retail sales, EU Trade balance, U.S. Empire state mfg, Net LT TIC flows, Industrial prod’n, Capacity utilisation, manufacturing production, U. of Michigan consumer confidence on Friday. (China is closed due to market holiday.)