Japanese Yen Falls On Fed/BoJ Divergence

(RTTNews) - The Japanese yen lost ground on Friday, amid a growing monetary policy divergence between the Federal Reserve and the Bank of Japan.

Overnight data showing a drop in initial jobless claims fuelled hopes that the Fed would continue to raise rates after a widely expected 25-basis-point increase next week.

Data from the Ministry of Internal Affairs and Communications showed that inflation in Japan re-accelerated in June.

Overall consumer prices in Japan rose 3.3 percent in June from 3.2 percent in May.

The BoJ is expected to stand pat on monetary policy when it meets next week.

The BoJ's policy stance is in contrast with the Fed, which is expected to lift rates by a quarter-point to 5.25-5.50 percent.

The yen fell to 182.52 against the pound and 141.95 against the greenback, setting 11-day lows. The yen is seen finding support around 185.00 against the pound and 145.00 against the greenback.

The yen was down against the franc, at a record low of 163.98.

The yen weakened to a fresh 2-week low of 95.78 against the aussie and a 2-week low of 107.74 against the loonie, off its early highs of 94.64 and 106.07, respectively. The next possible support for the currency is seen around 97.00 against the aussie and 109.00 against the loonie.

The yen dropped to a 3-day low of 87.90 against the kiwi and a multi-year low of 158.04 against the euro, from an early 2-day high of 87.03 and a 3-day high of 155.58, respectively. The currency may locate support around 89.00 against the kiwi and 159.00 against the euro.

Looking ahead, Canada new housing price index for June and retail sales for May will be featured in the New York session.