CANBERA (dpa-AFX) - The Japanese yen strengthened against other major currencies in the late European session on Tuesday, after the Bank of Japan or the BoJ Governor Kazuho Ueda's comments left the door open to further interest rate hikes.
The argument for progressively normalizing policy is strengthened by Ueda's statement that underlying inflation is getting close to 2 percent and has to be stabilized around that level.
Data from the Bank of Japan showed that Japan producer prices in Japan were down a seasonally adjusted 0.3 percent on month in September. That was well shy of expectations for an increase of 0.5 percent following the downwardly revised 0.3 percent contraction in August.
On a yearly basis, producer prices climbed 6.8 percent - again missing forecasts for an increase of 7.6 percent, which would have been unchanged.
Export prices were up 1.4 percent on month and 12.4 percent on year in September, the bank said, while import prices added 1.0 percent on month and 17.7 percent on year.
In the European trading today, the yen rose to an 8-day high of 176.49 against the euro and a 5-day high of 189.49 against the Swiss franc, from early lows of 177.11 and 190.21, respectively. If the yen extends its uptrend, it is likely to find resistance around 175.00 against the euro and 187.00 against the franc.
Against the pound and the U.S. dollar, the yen advanced to 4-day highs of 208.89 and 157.84 from early lows of 209.63 and 158.53, respectively. The yen may test resistance around 207.00 against the pound and 155.00 against the greenback.
Against Australia, the New Zealand and the Canadian dollars, the yen climbed to 4-day highs of 110.03, 88.39 and 110.68 from early lows of 110.44, 88.81 and 111.14, respectively. On the upside, 109.00 against the aussie, 87.00 against the kiwi and 109.00 against the loonie are seen as the next resistance levels for the yen.
Looking ahead, U.S. NFIB business optimism index for September, U.S. ADP employment data and U.S. existing home sales for September are slated for release in the New York session.
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