Yen Declines On Risk Appetite

The Japanese yen drifted lower against its major rivals in European deals on Wednesday, amid a rise in European stocks on easing concerns over Greece, after its Finance Minister Yanis Varoufakis dismissed chances of IMF debt default on June 5.

On Tuesday, Varoufakis said that the Mediterranean nation expects to finalize a deal with creditors by June 5, when the first IMF payment is due. However, he urged the international creditors to come to an agreement with Greece before the country runs out of money.

Group of seven nations' Finance ministers and central bank governors will meet in Dresden this week, with Greek issue to be on the agenda.

There is no need to react for the recent excessive movement of the Japanese yen, as that was due to the impact of the dollar's gain and not from the yen's decline, Japan finance minister Akira Amari told.

The US exit strategy could certainly impact the fx market, although rapid forex movements are not welcomed, he said.

The minutes of the Bank of Japan's April 30 meeting showed that the members of the bank's monetary policy committee were satisfied that the current stance for monetary policy remained appropriate

The underlying inflation trend was improving steadily, the minutes showed, although there was some debate about achieving the target goal of 2 percent

The yen was slightly weaker against most major currencies in the Asian session. It fell against the pound, euro and the franc but rose against the greenback.

The yen fell to 123.75 against the greenback, a level not seen since June 2007. The next possible downside target for the yen may be located around the 124.00 mark.

Pulling away from early highs of 133.76 against the euro and 128.99 against the Swiss franc, the yen dropped to a 5-day low of 134.77 and a 9-day low of 130.31, respectively. The yen is likely to find downside target levels of around 136.6 against the euro and 132.00 against the franc.

The yen drifted lower to 190.33 against the pound, its lowest since September 2008, from an early high of 189.21. If the yen extends decline, it may find downside target around the 194.00 level.

The yen reversed from early highs of 88.91 against the kiwi, 95.11 against the aussie and 98.91 against the loonie and edged down to 89.47, 95.60 and 99.43, respectively. The yen is seen finding support around 91.00 against the kiwi, 96.6 against the aussie and 100.00 against the loonie.

Looking ahead, the Bank of Canada will announce its interest rate decision at 10:00 am ET. Economists expect the bank to retain interest rates unchanged at 0.75 percent.