The Japanese yen strengthened against its major counterparts in the Asian session on Monday on safe-haven demand, as Asian shares declined following the negative cues from Wall Street Friday amid worries about global economic growth following the rising trade tensions between the U.S. and China as well as between Japan and South Korea.
China has vowed to retaliate to the U.S. decision to impose tariffs on $300 billion worth of Chinese goods.
China’s central bank allowed the yuan to weaken to more than a decade low to counter U.S. President Donald Trump’s latest tariff threat.
The exchange rate fell more than 1 percent after the People’s Bank of China set its daily reference rate at a weaker level than 6.9 for the first time since December.
Survey results from IHS Markit showed that Japan’s service sector began the third quarter with a moderate growth pace in July.
The Jibun Bank services Purchasing Managers’ Index fell slightly to 51.8 in July from 51.9 in June.
The yen appreciated to more than 7-month highs of 105.79 against the greenback and 71.40 against the aussie, from its early lows of 106.68 and 72.47, respectively. The yen may possibly challenge resistance around 104.00 against the greenback and 67.00 against the aussie.
Reversing from its early lows of 108.55 against the franc and 80.78 against the loonie, the yen climbed to 2-month highs of 108.04 and 79.98, respectively. The currency is likely to face resistance around 106.00 versus the franc and 76.5 against the loonie.
The yen advanced to more than a 2-year high of 117.67 against the euro and near a 3-year high of 128.28 against the pound, reversing from its early lows of 118.47 and 129.62, respectively. If the yen rises further, 114.00 and 125.50 are likely seen as its next resistance levels against the euro and the pound, respectively.
The yen strengthened to a 6-1/2-year high of 68.66 against the kiwi, from a low of 69.66 hit at 5:50 pm ET. On the upside, 66.00 is possibly seen as the next resistance level for the yen.
Looking ahead, PMI reports from major European economies and Eurozone Sentix investor confidence index for August are due in the European session.
At 10:00 am ET, U.S. ISM non-manufacturing composite index for July are scheduled for release.
The material has been provided by InstaForex Company – www.instaforex.com