Forexpros – The euro fell to a one-week low against the yen in thin trade on Wednesday, as uncertainty over the outcome of Italian bond auctions later in the day added to concerns over the euro zone’s debt crisis.
EUR/JPY hit 101.54 during European morning trade, the pair’s lowest since December 21; the pair subsequently consolidated at 101.62, shedding 0.16%.
The pair was likely to find support at 101.25, the low of December 19 and resistance at 102.19, the high of December 23.
Italy was scheduled to sell EUR9 billion euros of 179-day bills and EUR2.5 billion euros of zero-coupon 2013 securities later Wednesday.
Investors were cautious ahead of the auctions as the yield on Italy’s ten-year bonds rose above the 7% threshold, a level widely considered unsustainable and above which other euro zone governments had been forced to seek bailouts.
In Japan, preliminary data showed earlier that industrial production fell more-than-expected in November, tumbling 2.6% after a 2.2% rise the previous month. Analysts had expected industrial production to fall 0.7% in November.
Separate reports showed that Japan’s retail sales declined more-than-expected in November, falling 2.3%, while household spending slumped far more-than-expected by 3.2% in December.
Meanwhile Japanese core inflation rates came in better than expected, hitting minus 0.3% compared with forecasts for minus 0.4%.
Also Wednesday, Japan’s government warned that will not change its stance on taking appropriate action in the foreign exchange market as needed. The comments came after the U.S. criticized the country for intervening in order to stem the yen’s appreciation against the greenback.
The yen was also higher against the U.S. dollar with USD/JPY retreating 0.23%, to trade at 77.69.
Italy was also scheduled to auction EUR8.5 billion euros of debt due in 2014, 2018, 2021 and 2022 on Thursday.
Forexpros
