The Japanese yen edged lower across the board on Monday as risk-sentiment re-emerged on easing concern of a Greece exit from the eurozone following the pro-austerity New Democracy party won the parliamentary election in Greece.
The yen is viewed as a safe haven currency and it often rallies when the risk-sentiment fades and conversely lose ground when the market's appetite for risk is more robust.
New Democracy leader Antonis Samaras declared victory in the election and called parties to join a national salvation government, "as soon as possible." Delivering a victory speech on Sunday night, he said Greeks had voted to stay in the euro, and termed it a victory for "all Europe." He said Greece would honor its obligations to its lenders.
The Eurogroup reiterated its commitment to assist Greece in its adjustment effort in order to address the many challenges the economy is facing.
The troika, consisting of the European Union, the European Central Bank and the International Monetary Fund, will return to Athens as soon as a new government is in place "to exchange views" with the new government on the way forward and prepare the first review under the second adjustment
program, it said.
Meanwhile, the Bank of Japan kept its economic view almost unchanged saying that economic activity has started to pick up moderately as post-quake reconstruction continued to support domestic demand.
The economy is expected to return to a moderate recovery path buoyed by firm domestic demand and recovery in overseas economies, the central bank said in its monthly economic report.
BoJ said exports may increase moderately as overseas economies emerge from the deceleration phase. Public investment is expected to be on the rise and housing investment will continue to pick up.
Greece optimism sent the Asia-pacific stocks higher, with the benchmark Nikkei 225 index trading at 8,721.02, up 151.7 points or 1.77 percent from its previous close. Other markets in the Asia-Pacific region, barring India's Sensex, are in positive territory.
The yen slipped to a 3-week low of 124.68 against the pound, down by more than 2 percent from last Friday's 1-week high of 122.17. The near-term support for the yen is seen around the 125.0 level.
Asking prices for a property in the United Kingdom rose to a new record high in June, buoyed by strong price movements in London and South East, property website Rightmove said.
Prices of new property coming to market stood at GBP 246,235, marking a third consecutive national record. This was 1 percent higher than a month earlier and 2.4 percent above last years' level.
The yen slipped to 1-week lows of 100.87 against the euro and 84.0 against the Swiss franc. Key support levels to watch for the yen are 101.50 against the common currency and 84.50 versus the alpine unit.
The Japanese yen re-tested its early Asian session's low of 79.31 against the US dollar just ahead of the European session. The dollar-yen pair is presently worth 79.25 with 79.50 seen as the next likely target level.
The yen also underperformed against the commodity dollars on Monday, falling to nearly a 6-week low of 63.01 against the NZ dollar, 5-week low of 80.31 against the Australian dollar and a weekly low of 77.81 against the Canadian dollar.
Further downside pressure could fetch support levels for the Japanese currency at 78.10/15 against the loonie, 80.50/55 versus the aussie and 63.15/20 against the kiwi.
The New Zealand economy is expected to expand at a much slower rate than previously expected over the next two years, owing to weaknesses in the domestic economy and falling global demand, a survey of financial and economic agencies compiled by the New Zealand Institute of Economic Research (NZIER) showed today.
On average, respondents expect the economy to have expanded 1.2 percent in the year ended March 2012, slower than the 1.8 percent growth estimated earlier.
With little economic data to consider, investor focus is now shifting from Greece to the upcoming FOMC meeting on June 19-20 where policymakers may decide whether to extend a program known as Operation Twist that expires this month.
The market is also eying for the outcome of the meeting of G20 leaders, which will kick off a two-day summit in Mexico today.
Published: 2012-06-18 08:51:00 UTC+00
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