Yen strengthened across the board due to end of financial year repatriation flows back to Japan. This resulted in buying by Japanese exporters, lifting the currency. Most Japanese companies close their financial year at the end of March. USDJPY opened in Asia at 83.16 and slid to 82.83. EURJPY fell to 110.40 from 110.74.
The Australian dollar was weighed by selling against the yen as end of year redemptions pushed the cross rate down 0.7 percent to 86.33 from 86.94. As a result, AUDUSD tracked lower as well, reaching a low of 1.0419. On Tuesday the pair hit a high of 1.0556.
EURUSD did little during Asian hours, trading a tight range between 1.3311 and 1.3336. Many investors are waiting o the sidelines to get more on the state of the U.S. economy following Fed Chairman Ben Bernanke’s dovish comments on Monday.
Bernanke hinted that he is keeping the door open for more quantitative easing, based on a weak U.S. labour market. This policy usually weakens the dollar. The focus turns to US economic data on durable goods orders, due later today.
GBPUSD grabbed market attention when it hit the key psychological level of 1.60 yesterday. However, this was driven by a weaker dollar and not by U.K. fundamentals, as the British economy is still shaky. U.K. GDP data due today could give the pound a clearer direction.
Gold prices extended lower to $1,675.75, pressured by a firmer dollar. The two assets usually have an inverse relationship.