The Japanese yen gained ground across the board on Tuesday as lingering pessimism over the effective implementation of European austerity program following French and Greek election results increased risk-aversion.
Troika's effort to ward off a Greek exit from the eurozone seems to become ineffective as the results of the parliamentary elections from Greece showed that the two mainstream parties, who supported austerity program, suffered huge defeats while those opposed to more cuts won almost 60 percent support.
Concerns remained about the possibility of a new left-wing coalition government in Greece, which vowed to end austerity measures and reject the terms of Greece-Troika bailout deal. The latest political uncertainty occurred at a time when Greece is facing an immediate task of securing the next tranche of bailout from Troika to avoid a possible default.
The results of French election results also weighed on sentiment as the market is keenly waiting for the policies of the newly elected socialist President François Hollande. While saying that his mission is to "give European construction a growth dimension, Hollande pledged to push for less austerity and more growth in the region.
The yen was up 128.95 per pound and 79.83 per dollar around 3:20 am ET, up from early Asian session lows of 129.61 and 80.09, respectively.
House prices in the U.K. declined in April reversing March's improvement as the positive impacts from stamp duty concession on some properties and mild weather faded.
The Royal Institute of Chartered Surveyors said its house price balance slipped to -19 in April from -11 in March. The March figure was revised downward from the originally reported -10.
The yen that tested yesterday's lows against the euro and the Swiss franc at the beginning of Tuesday's Asian session rebounded in late trading. The Japanese unit is presently trading at 86.50 against the franc and 103.89 against the euro, up from previous lows of 86.97 and 104.46, respectively.
The yen also rallied against the resource-linked currencies, hitting as high as 81.12 against the Australian dollar, 63.22 against the New Zealand dollar and 80.19 against the Canadian dollar around 3:30 am ET.
Australia saw a seasonally adjusted merchandise trade deficit of A$1.587 billion in March, the Australian Bureau of Statistics said today. That missed forecasts for a shortfall of A$1.4 billion after showing a deficit of A$754 million in February. Exports were up 2.0 percent on month to A$24.521 billion, while imports jumped 5.0 percent to A$26.107 billion.
Looking ahead, German industrial production for March is due out at 6:00 am ET. Economists forecast industrial output to grow 0.8 percent on a monthly basis after falling 1.3 percent in February. Annually, it is expected to drop 1.2 percent.
The U.S. wholesale inventories report for March and Canada's housing starts for April are expected in the New York morning session.
by RTT Staff Writer
For comments and feedback: email@example.com