Yen Falls Amid Risk Appetite

The Japanese yen weakened against other major currencies in the Asian session on Thursday amid risk appetite among traders, driven by China after multiple Chinese government departments rolled out medium- and long-term investment plan with clear measures to boost capital market confidence. Concerns about tariff threats by U.S. President Donald Trump limited market's upside.

China has announced a plan to direct hundreds of billions of yuan in new capital from state-owned insurance companies into stocks each year to boost investor confidence and revive its stock market. Meanwhile, traders also expect the Bank of Japan will raise interest rates at the end of a two-day policy meeting on Friday.

Later in the day, traders look forward to the U.S. President Donald Trump's remarks as a new catalyst.

In economic news, data from the Ministry of Finance showed that Japan posted a seasonally adjusted merchandise trade surplus of 130.936 billion yen in December. That beat expectations for a deficit of 55.0 billion yen following the 110.3 billion yen shortfall in November.

Exports climbed 2.8 percent on year to 9.910 trillion yen - exceeding expectations for an increase of 2.3 percent after rising 3.8 percent in the previous month. Imports gained an annual 1.8 percent to 9.779 trillion yen versus forecasts for an increase of 2.6 percent following the 3.8 percent decline a month earlier.

In the Asian trading today, the yen fell to 8-day lows of 156.75 against the U.S. dollar and 172.92 against the Swiss franc, from yesterday's closing quotes of 156.44 and 172.59, respectively. If the yen extends its downtrend, it is likely to find support around 159.00 against the greenback and 176.00 against the franc.

Against the euro and the pound, the yen slid to 163.13 and 193.01 from Wednesday's closing quotes of 162.82 and 192.63, respectively. The next possible downside target for the yen is seen around 165.00 against the euro and 198.00 against the pound

The yen dropped to a 2-week low of 88.83 against the NZ dollar, from yesterday's closing value of 88.57. On the downside, 90.00 is seen as the next support levels for the yen.

Against the Australia and the New Zealand dollars, the yen edged down to 98.32 and 108.91 from Wednesday's closing quotes of 98.12 and 108.68, respectively. The yen is likely to find support around 99.00 against the aussie and 110.00 against the loonie.

Looking ahead, the Confederation of British Industry releases Industrial Trends survey results at 6:00 am ET in the European session. The order book balance is forecast to improve to -35 percent in three months to January.

In the New York session, U.S. weekly jobless claims, Canada retail sales data for November, U.S. KC Fed manufacturing index for January and U.S. EIA crude oil data are slated for release.

At 10:00 am ET, the European Commission releases flash euro area consumer confidence survey data. The sentiment index is seen rising to -14.0 in January from -14.5 in December.