2016.10.0301:44:00UTC+00Yen Falls Amid Rising Risk Appetite

The Japanese yen weakened against the other major currencies in the Asian session on Monday amid rising risk appetite, as worries about Deutsche Bank eased following reports that the German lender's hefty U.S. fine could be reduced by more than half. Meanwhile, investors also digested the Bank of Japan's quarterly Tankan survey, which showed that confidence at big Japanese manufacturers held steady in September, compared to three months earlier.

Friday, AFP reported that Deutsche Bank was nearing a $5.4 billion settlement with the U.S. Justice Department over its mortgage lending activities before the financial crisis. The Department of Justice had earlier asked the bank to pay a $14 billion fine to settle civil claims related to its residential mortgage-backed securities.

Data from the Bank of Japan's Tankan survey results showed that the big manufacturers' sentiment of Japan held steady at plus 6 in the three months to September, unchanged from the previous quarter. The economists had expected the index to be at plus7. The non-manufacturing index edged down to plus 18 from plus 19 the previous quarter.

In other economic news, data from Markit/Nikkei showed that Japan's manufacturing sector expanded in September for the first time in seven months. The final Markit/Nikkei flash manufacturing purchasing managers' index or PMI, improved to 50.4 from 49.5 in August.

Last Friday, the yen showed mixed trading against its major rivals. While the yen rose against the euro and the pound, it fell against the Swiss franc. Against the U.S. dollar, the yen held steady.

In the Asian trading, the yen fell to a 4-day low of 77.50 against the Canadian dollar, from Friday's closing of 77.11. The yen may tests support near the 80.00 region.

Against the euro, the pound and the Swiss franc, the yen dropped to 114.12, 131.49 and 104.52 from last week's closing quotes of 113.85, 131.31 and 104.18, respectively. If the yen extends its downtrend, it is likely to find support around 117.00 against the euro, 138.00 against the pound and 107.00 against the franc.

Against the U.S., the Australian and the New Zealand dollars, the yen edged down to 101.67, 77.72 and 73.89 from last week's closing quotes of 101.28, 77.52 and 73.75, respectively. The yen is likely to find support near 105.00 against the greenback, 79.00 against the aussie, and 75.00 against the kiwi.

Looking ahead, Swiss retail sales data for August and PMI reports from major European economies for September are due to be released later in the day.

In the New York session, U.S. final manufacturing PMI for September, construction spending for August, U.S. ISM manufacturing PMI data for September, and Canada RBC manufacturing PMI for September are slated for release.

Chinese banks will be closed in observance of National Day holiday, and German banks will be closed in observance of German Unity Day holiday.