Forex Asia Review – USDJPY rises higher to new 7-1/2 month high

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USDJPY and most JPY crosses moved higher, supported by bids by Japanese importers. The dollar/yen pair rose to a fresh 7-1/2-month high against the yen, hitting 80.53. Yen has been weakening recently since the Bank of Japan announced policy easing measures last week. Meanwhile, the euro also rose against the yen to hit a new 3-1/2 month high of Y107.69, the highest since early November last year.


The euro consolidated gains made against the dollar the day before after data on improving German business sentiment. EURUSD had a strong rally after the data and hit as high as 1.3377, the highest level since December 9. The pair traded a tight range during the Asian session. The German business sentiment data  from the Ifo think-tank was the trigger for the euro, raising hopes that the German economy, which is the largest in Europe,  is improving and will avoid recession despite the problems facing other euro zone countries. Looking ahead, the focus turns to German GDP data later today.


GBPUSD held onto yesterday’s gains, trading a tight range in Asia after reaching as high as 1.5752. United Kingdom GDP data due later today will be in focus.


With the euro surprisingly stronger and risk appetite was increased, the safe haven dollar demand was low. The ICE dollar index, which measures the greenback against a basket of currencies, stayed near a two-week low against a basket of major currencies at 78.68


The Australian dollar rose in the Asian session, making gains of 0.2 percent on the day, after the Reserve Bank of Australia Governor Glenn Stevens said in a press conference today that monetary policy is broadly neutral, and thus stoked speculation the central bank may hold off from cutting interest rates in the coming months.  This pushed AUDUSD  to a high of 1.0754, moving well off a three-week low reached on Thursday.