The Japanese yen is stronger

Good morning!

The Japanese yen is stronger by 0.8% at 101.76 per dollar as of 7:39 a.m. ET.

So far this year, the yen has appreciated by about 18% against the dollar.

A stronger Japanese currency
creates problems for the Japanese government and central bank, both of which have been struggling to jump-start the economy via the ambitious Abenomics plan. Plus, it has folks worried about corporate profits.

As for the rest of the world, here’s the scoreboard:

  • The British pound is getting smoked, falling to a 31-year low after the Bank of England’s Financial Stability report called Brexit “the most significant near-term domestic risks to financial stability”. The currency fell down 1.1% to 1.3130 against the dollar — its weakest level since September 1985. Moreover, the BOE’s Financial Policy Committee cut its countercyclical capital buffer for UK banks to zero from 0.50%. And, separately, the UK’s June PMI, which was collected before the UK voted to leave the European Union, showed that Britain’s industry suffered its worst quarter in more than three years, printing 52.3.
  • The euro is little changed at 1.1153 against the dollar after some disappointing European PMI data. Germany’s services reading fell to 53.7, and France’s dipped back into contraction with a reading of 49.9.
  • The Australian dollar is weaker by 0.8% at .7481 per dollar after the Reserve Bank of Australia kept interest rates unchanged at 1.75% at its July monetary policy meeting. “Taking account of the available information, the Board judged that holding monetary policy steady would be prudent at this meeting. Over the period ahead, further information should allow the Board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate,” the bank said in its accompanying statement.
  • The US dollar index is little changed at 95.57 ahead of some economic data. ISM New York will be released at 9:45 a.m. ET before factory orders and durable goods cross the wires at 10 a.m. ET.

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