2024.01.1205:37:00UTC+00Yen Rises As Most Asian Shares Traded Lower

The Japanese yen strengthened against other major currencies in the Asian session on Friday, as most Asian stock markets traded lower, driven by the continuing strength in the Japanese market and as traders reacted to a bunch of economic data from China, Japan and Australia.

Traders also digested the highly anticipated report on U.S. consumer price inflation in December, which showed a bigger than expected increase. A number of economists have said the data makes the US Fed less likely to cut interest rates in March, with many predicting the central bank will hold off until its May meeting.

In economic news, overall bank lending in Japan was up 3.1 percent on year in December, the Bank of Japan said on Friday - coming in at 614.599 trillion yen. That beat forecasts for a 2.7 percent increase and was up from 2.8 percent in November. For the fourth quarter of 2023, overall lending rose 2.9 percent, lending excluding trusts climbed 3.2 percent and lending from trusts added 0.6 percent.

Meanwhile, Japan posted a current account surplus of 1.926 trillion yen in November, the Ministry of Finance said on Friday. That missed forecasts for a surplus of 2.385 trillion and was down from 2.583 trillion in October. Exports were down 4.5 percent on year to 8.623 trillion yen and imports slumped an annual 11.4 percent to 9.348 trillion yen for a deficit of 724.1 billion yen. The capital account saw a deficit of 30.0 billion yen, while the financial account posted a surplus of 1.087 trillion yen.

Thursday, the safe-haven yen traded multi-day low against its major rivals.

In the Asian trading today, the yen rose to 2-day highs of 159.02 against the euro and 170.03 against the Swiss franc, from yesterday's closing quotes of 159.37 and 170.48, respectively. If the yen extends its uptrend, it is likely to find resistance around 155.00 against the euro and 166.00 against the franc.

Against the U.S. and the Canadian dollars, the yen advanced to 2-day highs of 144.84 and 108.30 from yesterday's closing quotes of 145.28 and 108.46, respectively. On the upside, 140.00 against the greenback and 104.00 against the loonie, are seen as the next resistance levels for the yen.

The yen edged up to 185.06 against the pound, 97.12 against the Australian dollar and 90.50 against the NZ dollar, from Thursday's closing quotes of 185.31, 97.15 and 90.54, respectively. The next resistance level for the yen is seen around 179.00 against the pound, 95.00 against the aussie and 88.00 against the kiwi.

Looking ahead, U.K. GDP data, trade data and industrial production, all for November are slated for release in the European session.

In the New York session, U.S. PPI for December and U.S. Baker Hughes weekly oil rig count data are set to be published.