CANBERA (dpa-AFX) - The Japanese yen strengthened against other major currencies in the Asian session on Thursday, after the Bank of Japan board member Hajime Takata hinted that the bank must consider overhauling its ultra-loose monetary policy, including the possibility of an exit from negative interest rates and bond yield control.
In a speech held today, the BoJ Bank of Japan board member Hajime Takata said that the bank should consider the possibility of an exit from yield curve control, negative interest rates and add measures to keep expanding its monetary base until inflation exceeds 2 percent.
'It's necessary to consider taking a nimble and flexible response, including on how to exit, or shift gear from the current extremely accommodative monetary policy,' Takata added.
Meanwhile, investors continue to be cautious ahead of the release of key U.S. inflation data later in the day. Some investors also looked to cash in on the recent strength in the markets.
The inflation data is likely to have a notable impact on the outlook for interest rates, as U.S. Fed officials have said they need greater confidence that inflation is slowing before cutting rates.
In economic news, industrial production in Japan was down a seasonally adjusted 7.5 percent on month in January, the Ministry of Economy, Trade and Industry or METI, said on Thursday. That missed forecasts for a decline of 6.7 percent following the 1.4 percent increase in December. On a yearly basis, industrial production sank 1.5 percent after shedding 0.7 percent in the previous month.
The METI also said the total value of retail sales in Japan was up 2.3 percent on year in January - coming in at 13.141 trillion yen. That beat forecasts for an increase of 2.0 percent following the upwardly revised 2.4 percent gain in December. On a seasonally adjusted monthly basis, retail sales rose 0.8 percent after sinking 2.6 percent a month earlier.
Wednesday, the yen showed mixed trading against its major rivals. While the yen rose against the euro and the pound, it fell against the U.S. dollar and the Swiss franc.
In the Asian trading today, the yen rose to 8-day highs of 162.22 against the euro and 189.65 against the pound, from yesterday's closing quotes of 163.29 and 190.76, respectively. If the yen extends its uptrend, it is may find resistance around 159.00 against the euro and 187.00 against the pound.
Against the U.S. dollar and the Swiss franc, the yen advanced to a 9-day high of 149.71 and a 3-day high of 170.46 from Wednesday's closing quotes of 150.67 and 171.43, respectively. The yen may test resistance around 148.00 against the greenback and 169.00 against the franc.
Against the Australia and the New Zealand dollars, the yen climbed to 2-week highs of 97.50 and 91.40 from yesterday's closing quotes of 97.89 and 91.86, respectively. The next possible upside target for the yen is seen around 95.00 against the aussie and 89.00 against the kiwi.
The yen rose to a 3-week high of 110.31 against the Canadian dollar from Wednesday's closing of 110.96. On the upside, 108.00 is seen as the next resistance level for the yen.
Looking ahead, Germany retail sales and unemployment data for January are due to be released in the pre-European session on Thursday.
In the European session, Germany unemployment data for February and U.K. mortgage approvals data for January are slated for release.
In the New York session, Germany flash consumer and harmonized prices for February, Canada GDP data for the fourth quarter, U.S. core PCE index for January, weekly jobless claims data, personal income and spending data for January, U.S. Chicago PMI for February, pending home sales data for January and U.S. Kansas Fed manufacturing index for February are set to be published.
At 10:50 am ET, Federal Reserve Bank of Atlanta President Raphael Bostic will deliver a speech on the economic outlook, monetary policy and the state of the banking industry before the 2024 Banking Outlook Conference hosted by the Federal Reserve Bank of Atlanta, in Atlanta, U.S.
Ten minutes later, Federal Reserve Bank of Chicago President Austan Goolsbee will speak virtually on 'Monetary Policy at an Unusual Time' before webinar event hosted by the Princeton University Bendheim Center for Finance.
At 1:15 pm ET, Federal Reserve Bank of Cleveland President Loretta Mester will deliver a speech on 'Financial Stability/Regulation' before the Columbia University/Bank Policy Institute 2024 Bank Regulation Research Conference, in New York, U.S.
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