After slumping for a day the Japanese yen regained its momentum against the U.S. dollar and the euro. Strength in the Japanese yen came after oil prices slid further, impacting global markets and spiking demand for the safe haven assets even in the face of Japan’s new negative interest rate policy.
Yen gains momentum
USD/JPY fell by 0.31% to 120.66 today, after touching a session low of 120.36. The currency had witnessed a sharp decline after the Bank of Japan adopted negative interest rates, but is now reversing. Stock markets across Asia and Europe fell in response to softening oil prices.
Meanwhile, the euro also traded higher against the U.S. dollar, up by 0.27% to 1.0917. The unemployment rate for December is scheduled to be released today in the Eurozone. It is estimated that the jobless rate will continue to be at 10.5%, little changed from November’s low.
Apart from this, Spain, the fourth largest economy in Eurozone has posted a record high jobless rate for the first time in three months. Spain’s Employment Ministry published a note where it said that the number of jobless people rose by 57,200 in January, which is below the forecast of an increase of 71,200. The country’s jobless count declined by 55,800 back in December.
At the same time, weakness in the dollar continues from a contraction in manufacturing activity in the US in January. The Institute for Supply Management reported that the purchasing managers’ index (PMI) stood at 48.2 in January versus 48.0 in December. Other than this, the Commerce Department had reported no change in the personal spending rate, contrary to expectations of an increase of 0.1%. However, personal income was up by 0.3%, better than the estimates of a 0.2% rise.
Back in China, economic data remained uninspiring as factory activity shrank to 49.4 from 49.7 in December, reflecting a decline for the sixth time in a row. Elsewhere, GBP/USD was in negative territory, sliding 0.56% to 1.4352. All eyes are set on Bank of England’s monetary stance during its meet on Thursday.