During the Asian session, Asian currencies rose, led by the Indonesian rupiah and South Korean won, as gains in regional equities boosted speculation investor demand in reviving for emerging-market assets.
Eight of the 10 most-active currencies in Asia outside Japan strengthened against the dollar as the MSCI Asia Pacific Index of regional stocks climbed 4 percent.
However, the Yen went against the trend of Asian currencies as it is affected by poor economic news emitting early in the session. Firstly, the news that Japanese business sentiment is falling to a record low. The business sentiment index for corporations with capital of 1 billion yen or more came in with a -51.3 read for the first quarter of this year, way below the -35.7 seen in the final quarter of 2008. The latest data is a new record low and the fifth consecutive quarter the index has been in negative territory.
The second quarter outlook index for large companies came in a -24.8 and -7 for the third quarter. The survey is widely seen as a precursor of what we’re likely to see in the Tankan business sentiment survey that is due on April 1. Given the evidence above, it is likely to make for very grim reading.
In other news from Japan, land prices dropped for the first time in three years in 2008, official data showed, reflecting the impact of financial crisis on Japan's real estate market.
The USDJPY opened gap down and find support at 38.2% retracement at 22:00 GMT. A reversal hammer candle carried the prices up to 96.50 area at 50% fibo expansion with blue lag moving above 15 and MACD with upside cross. The top that occurred at 2:30 GMT was followed by bearish engulfing candles.
USDJPY from the new high, retraced back 38.2% by 7:30 GMT. With a reversal morning star candle, USDJPY moved upward as the dollar strengthened during the European and London session. Prices managed to overcome the day’s high and consolidated during early morning US session.
The home sales data released at 14:00 GMT that had been expected to dip further was a surprised to the upside with affordability improving. Sales in February rose 5.1% while prices versus a year ago fell 15%. Mortgage rates are a good deal lower as well. Equities are responding favorably to the news and risk aversion is lessening, helping JPY crosses. This housing data comes as Timothy Geithener unfolds the Toxic Assets plan.
The bad news in Japan and the good news in US managed to push USDJPY from a low at around 95.50 in early Asian session to 97.70 during early US session.
