2010.07.2900:38:00UTC+00Yen Jumps To Multi-day Highs Against Most Majors

The Japanese yen rallied across the board on Thursday morning in Asia as most Asian stocks are exhibiting weakness today, which prompted traders to seek safe-haven currencies. The yen touched multi-day highs against majors, barring pound and the Australian dollar.

The yen typically strengthens in times of stock market slide as its safe haven status makes the currency more attractive to investors.

Tracking cues from Wall Street, where stocks drifted lower overnight following a decline in durables goods orders and the Federal Reserve's none too encouraging remarks about the U.S. economy, the Japanese stock market is trading weak today.

The benchmark Nikkei 225 index, which hit a two-week closing high on Wednesday, is currently down 52.42 points or 0.54% at 9,700.42.

Among other markets in the Asia-Pacific region, Australia, New Zealand, South Korea and Taiwan are trading weak, while Shanghai, Malaysia and Singapore are up with modest gains.

In economic news, retail sales in Japan were up 3.2 percent on year in June, the Ministry of Economy, Trade and Industry said today, standing at JPY 11.004 trillion. That was in line with analyst expectations following the 2.8 percent increase in May.

On a monthly basis, retail sales were down a seasonally adjusted 0.4 percent - again matching expectations following the 2.0 percent contraction in May.

The Japanese currency climbed to a 3-day high of 84.02 against the Canadian dollar by 9:10 pm ET from 84.25 hit late New York Wednesday. The loonie-yen pair is presently worth 84.23 with 83.0 seen as the next likely target level.

The yen advanced to a 2-day high 82.47 against the Swiss franc and 113.19 against the euro and around 10:25 pm ET and this may be compared to Wednesday's New York session closing quotes of 82.81 and 113.67, respectively. On the upside, the yen may target resistance levels at 111.90 against the euro and 82.20 against the Swiss franc.

Against the US dollar, the yen touched a 2-day high of 87.13 around 11:00 pm ET and the next likely resistance level for the domestic unit is seen at 86.80 level. The greenback-yen pair, which ended yesterday's deals at 87.48, is presently quoted at 87.23.

The greenback was generally weak after the Beige Book on Wednesday pointed to a less-than-booming economic recovery with sluggish housing markets and sales of costly items like new cars weakening. Overall, the report was less upbeat than June's, which detailed a moderate economic rebound.

The yen also reached as high as 135.94 against the pound and 77.84 against the Australian dollar before holding steady around 9:15 pm ET. On the upside, the domestic unit may find target levels at 77.30 against the aussie and 134.50 against the pound.

The yen that closed yesterday's deals at 136.47 against the pound and 78.16 against the aussie is presently quoted at 136.18 and 78.07, respectively.

The yen advanced to a 6-day high of 62.88 against the New Zealand dollar by 9:15 pm ET, compared to 63.64 hit late New York Wednesday. The kiwi-yen pair moved sideways thereafter and is presently worth 63.18 with 62.60 seen as the next likely target level.

The New Zealand dollar slumped after the Reserve Bank of New Zealand noted in the statement after the interest rate decision that the pace of further rate increase is "likely to be more moderate than was projected in the June Statement".

The Reserve Bank of New Zealand hiked its Official Cash Rate by 25 basis points to 3.00 percent. The increase was widely expected by economists. It was the second straight increase of 25 basis points for the RBNZ, which raised rates to 2.75 percent to 2.50 percent on June 10.

In economic news, New Zealand's trade balance shrank in the June month to NZ$276 million, down from the previous month's NZ$814 million.

Looking ahead, Italian business confidence, German unemployment rate and the euro-zone consumer confidence data-all for the month of July and the French PPI data for June are expected to garner market attentions in the upcoming European session.

Turning to the U.S., market focus is likely to be on weekly jobless claims data for the weekended July 24, which is scheduled to be released at 8:30 am ET.

Statistics Canada's industrial product price and raw material price indexes for June are also on tap in the North American session.

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