Yen Falls, Aussie Rises; As Asian Stock Markets Traded Higher

(RTTNews) - The Japanese yen weakened and the Australian dollar strengthened against their major currencies in the Asian session on Monday, as most Asian stock markets traded higher following the broadly positive cues from global markets on Friday. Traders digest the better-than-expected US consumer price inflation data that is expected to impact the outlook for interest rate hikes. Most of the markets in the region closed for Labor Day holiday. Traders now look ahead to the U.S. Federal Reserve's monetary policy meeting scheduled for Wednesday. "The FOMC will hike another quarter-point, and may indicate further hikes remain a possibility," FHN Financial Chief Economist Chris Low said.

In economic news, data from Jibun Bank showed that the manufacturing sector in Japan continued to contract in April, albeit at a slower rate, with a manufacturing PMI score of 49.5. That's up from 49.2 in March although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction.

Data from Judo Bank showed that the manufacturing sector in Australia continued to contract in April, and at a faster rate, with a 35-month low manufacturing PMI score of 48.0. That's down from 49.1 in March and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.

In the Asian trading today, the yen fell to 150.84 against the euro for the first time since September 2008, 172.09 against the pound for the first time since 31st 0ctober 2022 and 153.22 against the Swiss franc for the first time since December 1979. At Friday's close, the yen was trading at 150.07 against the euro, 171.07 against the pound and 152.19 against the franc. If the yen extends its downtrend, it may find support around 159.00 against the euro, 175.00 against the pound and 158.00 against the franc.

Against the U.S., the Australia and the New Zealand dollars, the yen dropped to near 2-month lows of 136.94, 90.88 and 84.69 from last week's closing quotes of 136.28, 90.13 and 84.17, respectively. The yen may test support around 142.00 against the greenback, 94.00 against the aussie and 88.00 against the kiwi.

The yen slipped to near a 5-month low of 101.05 against the Canadian dollar, from Friday's closing value of 100.59. On the downside, 105.00 is seen as the next support level for the yen.

The Australian dollar rose to a 5-day high of 1.6582 against the euro, from last week's closing quote of 1.6646. The aussie may test resistance around the 1.59 area.

Against the U.S. dollar, the aussie advanced to 0.6640 from Friday's closing value of 0.6614. On the upside, 0.68 is seen as the next resistance level for the aussie.

Against the Canada and the New Zealand dollars, the aussie edged up to 0.8997 and 0.0735 from an early more than a 2-week low of 0.8946 and nearly a 3-week low of 1.0677, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.91 against the loonie and 1.09 against the kiwi.

Looking ahead, U.S. and Canada S&P Global final manufacturing PMI reports for April, U.S. ISM Manufacturing PMI for April and U.S. construction spending data for March are due to be released in the New York session.

Most markets around the world are closed amid Labour Day holiday.