OTTAWA (dpa-AFX) - The Japanese yen weakened against other major currencies in the Asian session on Thursday amid increased risk-on mood, as traders react to U.S. President Donald Trump's speech at the World Economic Forum, where he ruled out the use of military force to take control of Greenland. Concerns about a tariff war between the U.S. and Europe also subsided after Trump said he would not go forward with the tariffs he threatened to impose on several European nations.
Trump had announced reaching a Greenland deal 'framework' with NATO Secretary General Mark Rutte.
The result of a critical two-day BoJ policy meeting on Friday and Governor Kazuo Ueda's remarks at the press conference following the decision will continue to dominate market attention. Investors await additional indications regarding when the Bank of Japan which is likely to raise interest rates.
Aside from this, the JPY is being impacted by the recent disorderly selloff in Japan's bond markets, which was sparked by worries about Prime Minister Sanae Takaichi's expansionary fiscal policies.
In economic news, data from the Ministry of Finance showed that Japan posted a merchandise trade surplus of 105.7 billion yen in December. That missed forecasts for a surplus of 357.0 billion yen and was down from 316.7 billion yen in November.
Exports were up 5.1 percent on year at 9.906 trillion yen - shy of expectations for a gain of 6.1 percent, which would have been unchanged from the previous month.
Imports climbed an annual 5.3 percent to 9.978 trillion yen versus forecasts for an increase of 3.6 percent and up from 1.3 percent from a month earlier.
In the Asian trading today, the yen fell to a 35-year low of 185.68 against the euro, a 2-day low of 213.27 against the pound and a 1-week low of 158.85 against the U.S. dollar, from yesterday's closing quotes of 184.96, 212.58 and 158.27, respectively. If the yen extends its downtrend, it is likely to find support around 186.00 against the euro, 214.00 against the pound and 159.00 against the greenback.
Against the Swiss franc, the yen edged down to 119.92 against the Swiss franc from an early 2-day high of 198.82. On the downside, 201.00 is seen as the next support level for the yen.
Against the New Zealand and the Canadian dollars, the yen slipped to 1-1/2-year lows of 93.02 and 114.94 from Wednesday's closing quotes of 92.50 and 114.42, respectively. The next possible upside target for the yen is seen around 201.00 against the franc, 94.00 against the kiwi and 116.00 against the loonie.
Looking ahead, Canada new housing price index for December, U.S. GDP Growth Rate for the third quarter, U.S weekly jobless claims, U.S. core PCE prices for the third quarter, personal income and spending data for November, U.S. Kansas Fed manufacturing index for January and U.S. EIA crude oil data are slated for release in the New York session.
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