Yen Rises Amid Risk-off Mood

(RTTNews) - The Japanese yen strengthened against other major currencies in the Asian session on Thursday, as Asian stock markets traded lower amid a re-escalation in the Middle East conflict after a deadly attack on a Saudi oil field overnight sent crude oil prices spiking and added to concerns over supply disruptions and global inflationary pressures.

A drone strike targeted the Saudi Aramco's Shaybah field that killed two people. Following this strike, the US ordered some personnel and family members to leave American embassies in Saudi Arabia.

Traders also remain cautious ahead of the interest rate decision by the US Fed next week, along with the European Central Bank and the Bank of Japan. All three central banks are expected to maintain their current interest rates.

Additionally, the Bank of Japan or the BoJ rate hike bets and intervention risks boost the JPY.

Earlier this week, BoJ Governor Kazuo Ueda stated that underlying inflation is getting closer to the central bank's 2% objective, raising market expectations for a December interest rate increase.

At the upcoming policy meeting on October 27-28, US Federal Reserve (Fed) policymakers recently hinted that raising interest rates is not urgent. Additionally, US bond rates continue to decline from multi-year highs, pushing the US dollar (USD) to a three-week low and reducing the rate difference between the US and Japan.

In the Asian trading today, the yen rose to nearly a 3-week high of 157.12 against the U.S. dollar, from yesterday's closing value of 158.15. The yen is likely to find resistance around the 156.00 region.

Against the euro and the pound, the yen advanced to 3-day highs of 176.70 and 210.60 from Wednesday's closing quotes of 177.67 and 211.84, respectively. If the yen extends its uptrend, it is likely to find resistance around 175.00 against the euro and 209.00 against the pound.

The yen jumped to 191.33 against the Swiss franc, from an early 2-day low of 191.95. On the upside, 189.00 is seen as the next resistance level for the yen.

Against Australia, the New Zealand and the Canadian dollars, the yen advanced to 3-day highs of 110.10, 89.39 and 112.01 from an early near 4-week high of 111.31, a 1-month low of 90.34 and more than a 1-month low of 112.69, respectively. The next possible upside target for the yen is seen around 108.00 against the aussie, 88.00 against the kiwi and 110.00 against the loonie.

Looking ahead, Canada new housing price index, PPI data and raw materials price, all for September, Eurozone flash consumer confidence for September, U.S. Consumer Board's leading index for September, U.S. weekly jobless claims data and U.S. Kansas Fed manufacturing index for September are slated for release in the New York session.