Yen Slides As Traders Await FX Market Intervention

The Japanese yen weakened against other major currencies in the Asian session on Monday, as traders await possible currency intervention by the Japanese authorities to slow the currency decline.

Japanese Finance Minister Shunichi Suzuki said, "We are closely monitoring developments and will take all necessary steps."

Traders also await the inflation data due later this week for more clues on the economy.

In economic news, the value of core machine orders in Japan jumped by a seasonally adjusted 7.7 percent on month in February, the Cabinet Office said on Monday - coming in at 886.6 billion yen. That blew away expectations for an increase of 0.8 percent following the 1.7 percent drop in January.

On a yearly basis, core machine orders slipped 1.8 percent - but that also beat forecasts for a decline of 5.0 percent after slumping 10.9 percent in the previous month. For the first quarter of 2024, core machine orders are seen higher by 4.9 percent on quarter and down 0.1 percent on year at 2,637.4 billion yen. Meanwhile, Asian stocks traded lower amid widespread selling on concerns about inflation, uncertainty about the likely timing of interest rate cuts, and rising geopolitical tensions in the middle-east where Iran launched retaliatory attack on Israel.

In the Asian trading today, the yen depreciated to nearly a 34-year low of 153.86 against the U.S. dollar, from Friday's closing value of 153.28. The yen may test support near the 154.00 region.

Against the euro, the pound and the Swiss franc, the yen slid to 163.92, 191.77 and 168.33 from last week's closing quotes of 163.12, 190.80 and 167.63, respectively. If the yen extends its downtrend, it is likely to find support around 166.00 against the euro, 194.00 against the pound and 171.00 against the franc.

Against the Australia, the New Zealand and the Canadian dollars, the yen edged down to 99.81, 91.54 and 111.85 from Friday's closing quotes of 99.02, 90.99 and 111.26, respectively. The next poosble downside target for the yen is seen around 101.00 against the aussie, 94.00 against the kiwi and 113.00 against the loonie.

Looking ahead, Switzerland producer and import prices for March is due to be released at 2:30 am ET in the pre-European sesssion

In the New York session, Canada manufacturing sales data and wholesale sales data, both for February, U.S. retail sales for March, U.S. NY Empire State manufacturing index for April, business inventories for February and U.S. NAHB housing market index for April are slated for release.