The Japanese Yen rebounded during Friday’s Asian trading, halting a decline that has been more or less continuous during the previous days, after Japan’s Minister of Finance warned against rapid moves in currency markets.
Japan’s Minister of Finance Taro Aso warned that the yen’s plunge during the past week was too rapid and that rapid moves either on the upside or the downside were undesirable. He was speaking after a meeting of the cabinet.
The yen pushed the dollar all the way back to 117.35 from 118 before Aso’s comments and a high of 118.98 registered on Thursday. Euro / yen dropped to as low as 147.45 from a 6-year high of 149.12 the previous day.
Many in the market were skeptical whether Aso’s comments would manage to turn the negative tide against the yen or whether traders would take advantage of the pullback to reposition their yen shorts. The latter appeared more likely.
Euro / dollar resisted efforts to drive it above 1.2570. The previous day’s news included better-than-expected US inflation, which contrasted with weaker PMI business confidence indicators out of the Eurozone. The fact that the euro held on to the 1.25 level in the light of the weak PMIs, suggests that it might not be so easy for the dollar to push the euro lower at present. Euro / dollar was trading at 1.2540.
Looking ahead, it should be a relatively quiet session with little in the way of data releases. The President of the ECB, Mario Draghi and the head of the German Bundesbank Jens Weidmann will be speaking at a banking event in Frankfurt early during the European Session.