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Yen weaker in Asia as trade, Aso noted, European polls eyed

4/20/2017, 9:55:22 AMBasics of Trading
Yen weaker in Asia as trade, Aso noted, European polls eyed

The yen weakened in Asia on Thursday after trade data and comments from the finance ministry as markets traded cautious ahead of French polls at the weekend and as Britain gets set to head to the polls this summer.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.02% to 99.69.

USD/JPY changed hands at 108.97, up 0.10%, while AUD/USD gained 0.05% to 0.7502. Meanwhile, EUR/USD traded at 1.0716, up 0.05%, while GBP/USD rose 0.06% to 1.2783.

On the economic front, Japan reported that March exports rose 12% on year, against a 6.% increase projected by analysts for the fourth consecutive month of gains, while imports rose 15.8%, well above the 10.4% increase seen. The trade surplus came in at ¥615 billion yen, wider than the ¥576 billion yen increase seen.

As well, Japan's Finance Minister, Taro Aso, said on Wednesday there would be "various problems" if the Bank of Japan resorted to helicopter money as this would undermine the central bank's independence.

Overnight, the dollar remained broadly higher against other major currencies on Wednesday, but gains were capped by ongoing U.S. political uncertainty and geopolitical tensions around the world.

Sentiment on the greenback remained vulnerable as trade talks between the U.S. and Japan got underway this week, with markets awaiting indications of the direction U.S. trade policy could take under President Donald Trump, who campaigned on a protectionist platform.

Heightened tensions around North Korea, which has vowed to conduct more missile tests following Sunday's failed missile launch, also continued to weigh on the greenback.

U.S. Vice President Mike Pence said on Wednesday that Washington would work with its allies and China to put economic and diplomatic pressure on North Korea.

Markets were also jittery ahead of the first round of the French presidential election, scheduled on Sunday April 23. The race tightened after a surge in polls for far-left candidate Jean-Luc Melenchon, who wants a referendum on the country’s European Union membership.

On Wednesday, the British Parliament approved by an overwhelming 522 votes against 13 May’s call for an early election, setting the stage what will define the terms of the U.K.’s withdrawal from the European Union.