OTTAWA (dpa-AFX) - The Japanese yen strengthened against other major currencies in the European session on Wednesday, as traders await additional clues regarding the anticipated timing of the Bank of Japan's (BoJ) next rate hike.
The outcome of a two-day BoJ meeting on Friday, which will have a significant impact on the JPY's near-term trajectory, is therefore still the center of attention.
However, the JPY may continue to benefit from anticipation that Japanese authorities would step in to stop further depreciation of the home currency.
In addition, present risk-averse sentiment and the likelihood of additional policy tightening by the BoJ should strengthen the safe-haven JPY.
Last week, Satsuki Katayama, Japan's finance minister, made a suggestion that the US and Japan may work together to address the recent decline in the value of the Japanese yen.
The European stocks traded lower with ongoing trade jitters linked to Greenland keeping investors on edge.
The 'Sell America' trade took a breather and the euro held near recent highs ahead of U.S. President Donald Trump's speech at Davos. ECB President Christine Lagarde will also speak at the Summit later in the day.
In the European trading today, the yen rose to 184.82 against the euro, from an early 1-week low of 185.54. The yen may test resistance around the 183.00 region.
Against the pound and the Swiss franc, the yen advanced to 211.97 and 199.26 from early lows of 212.65 and 200.31, respectively. If the yen extends its uptrend, it is likely to find resistance around 210.00 against the pound and 197.00 against the franc.
Against the U.S. and the Canadian dollars, the yen climbed to 157.82 and 114.09 from early lows of 158.28 and 114.39, respectively. On the upside, 156.00 against the greenback and 112.00 against the loonie are seen as the next resistance levels for the yen.
Looking ahead, U.S. MBA mortgage approvals data, Canada PPI data and raw material prices, both for December, U.S. pending home sales for December and construction spending for September are slated for December in the New York session.
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