Yen bounces after Shinzo Abe’s adviser says it is weak enough

USD/JPY dropped over 30 pips in the Asian session on Tuesday in reaction to comments from Japan PM Abe’s economic advisor Hamada who said the yen has weakened enough. He believes the 120.00 yen level is “weak” enough. USD/JPY fell from120.17 to 119.79 today and yesterday the pair plunged from 120.84 to 119.68. EUR/JPY, was already heavy after falling to a new multi-year low of 126.51 yesterday, and fell back from 127.01 to 126.65. The downside bias remains.

EUR/USD opened in Asia at 1.0565 after consolidating in the US session following a bounce from 1.0520 to 1.0611. The weaker dollar from the USD/JPY plunge contributed to the EUR/USD rise. Early action saw a small boost to 1.0594 but sellers reemerged at the high and pushed it back down to 1.0550 later. Sentiment remains decidedly bearish with lower lows and highs seen over the past five days.

GBP/USD hovered near 5-year lows. Cable hit a low of 1.4564 yesterday, the lowest since 2010. In Asia today it bounced to 1.4692. EUR/GBP traded sideways between 0.7200-13, just above yesterday’s 0.7198 low and looking for a reason to move lower.

USD/CHF see-sawed between 0.9758-85 in thin Asia trading. EUR/CHF remained on the back foot with an attempt to retrace higher stymied at 1.0338. It fell later to 1.0321, below yesterday’s 1.0322 low.

AUD/USD opened in Asia at 0.7589 and traded up from 0.7583 to 0.7624 on broad USD weakness. Helping support aussie was a better NAB business survey report. Wednesday’s first quarter Chinese GDP is the next risk event for the AUD pair. A number above +7% y/y would lift aussie but anything below 6.8% could see AUD fall lower.

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