Japanese Yen Weakens On China Stimulus Hopes

(RTTNews) - The Japanese yen dropped against its major counterparts in the Asian session on Tuesday, as Asian stock markets are mostly higher on the prospect of more stimulus from China to revive economic growth.

China's state planner, the National Development and Reform Commission, said that it approved eight fixed-asset investment projects worth a total of 236.8 billion yuan in July.

The Commission pledged that it would roll out measures to support starting up businesses and job employment.

China will optimize policies for sustained economic recovery and boost demand in a strong, reasonable and moderate manner, it added.

Overnight data showed that New York Fed's empire manufacturing survey and NAHB housing market index fell in August, sparking hopes that the Fed is likely to slow the pace of rate hikes to avoid a recession.

The yen weakened to a 4-day low of 133.74 against the greenback, off an early high of 132.95. The yen may locate support around the 136.00 level.

The yen retreated to 160.87 against the pound, 135.64 against the euro and 141.12 against the franc, after climbing to a 2-week high of 160.09, near 2-week high of 134.94 and a 5-day high of 140.49, respectively in early deals. The yen is poised to challenge support around 162.00 against the pound, 138.00 against the euro and 143.00 against the franc.

The yen reached as low as 103.56 against the loonie. Should the currency falls further, it is likely to test support around the 105.00 region.

The yen edged down to 93.88 against the aussie and 84.95 against the kiwi, down from its prior highs of 93.08 and 84.42, respectively. The next possible support for the yen is seen around 95.00 against the aussie and 86.00 against the kiwi.

Looking ahead, German ZEW economic sentiment for August is due out in the European session.

At 8:15 am ET, Canada housing starts for July are scheduled for release.

Canada inflation data and U.S. building permits and housing starts and industrial production, all for July, will be released in the New York session.