Yen Strengthens On Rising Risk Aversion

The Japanese yen firmed against its major counterparts in the Asian session on Thursday, as most Asian stock markets fell following the negative cues overnight from Wall Street after a drop in the benchmark 10-year U.S. Treasury yield to fifteen-month lows.

The sell-off in Treasury yields stocked fears about an economic slowdown in the U.S.

Trade talks resume between the U.S. and China today in Beijing, with few signs of breakthrough on the most difficult issues.

U.K. Prime Minister Theresa May has agreed to quit at a meeting of Conservative lawmakers, if MPs pass her Brexit deal.

There is still no clarity on Brexit as MPs, who have seized control of the parliamentary timetable from the government, failed to rally behind any single option.

The yen climbed to a 2-day high of 110.04 versus the greenback and a 3-day high of 110.58 versus the Swiss franc, from its early lows of 110.53 and 111.13, respectively. The yen is likely to find resistance around 108.00 against the greenback and 111.13 against the franc.

The yen strengthened to more than a 2-month high of 123.81 against the euro and held steady thereafter. This follows a low of 124.36 seen at 6:00 pm ET. On the upside, 122.00 is possibly seen as the next resistance level for the yen.

The yen advanced to 2-day highs of 145.08 against the pound and 82.05 against the loonie, off its early lows of 145.92 and 82.44, respectively. The Japanese currency traded sideways against the pound and the loonie in subsequent deals. The next possible resistance for the yen is seen around 143.00 against the pound and 81.00 against the loonie.

On the flip side, the yen retreated to 75.19 against the kiwi and 78.24 against the aussie, from its early near a 5-week high of 74.74 and a 3-day high of 77.91, respectively. The yen is seen challenging support around 77.00 against the kiwi and 80.00 against the aussie.

Looking ahead, Eurozone M3 money supply for February and economic sentiment index for March are due in the European session.

At 7:15 am ET, Federal Reserve Governor Randal Quarles will speak about the Financial Stability Board agenda at a policy conference hosted by the European Central Bank in Frankfurt.

German flash inflation for March, U.S. GDP data for the fourth quarter, weekly jobless claims for the week ended March 23 and pending home sales for February are scheduled for release in the New York session.

Federal Reserve Governor Richard Clarida is scheduled to participate in a panel discussion titled "Global Shocks and the U.S. Economy" at a symposium hosted by the Bank of France in Paris at 9:30 am ET.

Federal Reserve Governor Michelle Bowman will deliver a speech about agriculture and community banking at a town hall event in New Mexico at 10:00 am ET.

At 1:00 pm ET, the Swiss National Bank Governing Board Member Andrea Maechler will give a speech about the development of payments in the Digital Age at the Money Market Event in Zurich.

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