Yen Rises After Fed Rate Cut

The Japanese yen strengthened against other major currencies in the Asian session on Friday, after the U.S. Fed delivered the widely expected decision to lower interest rates by a quarter point and signaled no intention to skip cutting rates. The Bank of England also cut interest rates.

Fed Chair Jerome Powell stressed during his post-meeting press conference that rates are not on "any preset course" and that the central bank will make future decisions "meeting by meeting" to deal with the risks to both sides of the dual mandate.

Powell added that the central bank will evaluate data to adjust the "pace and destination" of rates.

Katsunobu Kato, Japan's finance minister, stated Friday that he "will closely monitor the impact of Trump's policies on Japan's economy."

In economic news, the average of household spending in Japan was down 1.1 percent on year in September, the Ministry of Economy, Trade and Industry said on Friday - coming in at 287,963 yen. That beat forecasts for a decline of 1.8 percent following the 1.9 percent drop in August. On a monthly basis, spending fell 1.3 percent - shy of expectations for a decline of 0.7 percent following the 2.0 percent increase in the previous month. The average of monthly income per household stood at 493,942 yen down 1.6 percent on year.

In the Asian trading today, the yen rose to nearly a 2-week high of 164.50 against the euro and a 4-day high of 174.80 against the Swiss franc, from yesterday's closing quotes of 165.23 and 175.26, respectively. The yen may test resistance near 160.00 against the euro and 171.00 against the franc.

Against the pound, the U.S. dollar and the Canadian dollar, the yen advanced to 2-day highs of 197.83, 152.55 and 109.91 from Thursday's closing quotes of 198.59, 152.93 and 110.32, respectively. If the yen extends its uptrend, it is likely to find resistance around 191.00 against the pound, 145.00 against the greenback and 105.00 against the loonie.

Against the Australia and the New Zealand dollars, the yen edged up to 101.46 and 91.62 from yesterday's closing quotes of 102.13 and 92.13, respectively. The next possible upside target for the yen is seen around 98.00 against the aussie and 90.00 against the kiwi.

Looking ahead, Canada jobs data for October, U.S. University of Michigan's consumer sentiment data for November and U.S. Baker Hughes oil rig count data are slated for release in the New York session.