2021.05.2007:54:00UTC+00Japanese Yen Rises On Fed Tapering Worries

The Japanese yen moved higher against its most major trading partners in the Asian session on Thursday amid safe-haven status, as minutes of the Federal Reserve's April monetary policy meeting hinted that several policymakers are willing to discuss about tapering at upcoming meetings should the economic recovery continue to gain momentum.

The minutes indicated that some Fed officials considered that it may be appropriate to begin discussing a plan for adjusting the pace of asset purchases at some point in upcoming meetings.

A "number of participants" observed that consumer prices could remain elevated well into next year, although the Fed expected inflationary pressures to ease when transitory factors fade.

Data from the Ministry of Finance showed that Japan posted a merchandise trade surplus of 255.3 billion yen in April. That exceeded expectations for a surplus of 140 billion following the downwardly revised 662.2 billion yen surplus in March (originally 663.7 billion yen).

Exports surged 38.0 percent on year to 7.181 trillion yen, beating forecasts for a gain of 30.9 percent after climbing 16.1 percent in the previous month. Imports advanced an annual 12.8 percent to 6.925 trillion yen versus expectations for a gain of 8.8 percent and up from 5.8 percent a month earlier.

Data from the Cabinet Office showed that Japan core machine orders rose a seasonally adjusted 3.7 percent on month in March, coming in at 798.1 billion yen. That missed expectations for an increase of 6.4 percent following the 8.5 percent decline in February.

On a yearly basis, core machine orders fell 2.0 percent - beating forecasts for a fall of 2.6 percent after sinking 7.1 percent a month earlier.

The yen edged higher to 132.85 against the euro and 120.66 against the franc, from its early lows of 133.09 and 120.90, respectively and held steady thereafter. Next key resistance for the yen is seen around 129.00 against the euro and 116.5 against the franc.

The yen gained to 153.95 against the pound, from its prior low of 154.25, and was steady. Should the yen rises further, it may find resistance around the 150.00 level.

The yen appreciated to 108.98 against the greenback, off its previous low of 109.31. The yen is seen finding resistance around the 107.00 mark.

The yen reached as high as 89.95 against the loonie earlier in the session and held steady thereafter. On the upside, 88.00 is possibly seen as its next resistance level.

In contrast, the yen dropped to 84.63 against the aussie and 78.47 against the kiwi, from Wednesday's closing values of 84.37 and 78.24, respectively. If the yen slides further, it may find support around 88.00 against the aussie and 82.00 against the kiwi.

Looking ahead, Eurozone current account and construction output for March are due in the European session.

Canada new housing price index for April and U.S. weekly jobless claims for the week ended May 15 will be released in the New York session.