Yen pushes toward five-month high

The Japanese currency has held on to its gains from last week, and is trading below its 200 daily moving average (DMA) for the first time since October 2013.

Japanese stock exchange
Source: Bloomberg

USD/JPY hit a near one-month low of 101.32 last Friday, the weakest since May 21. The pair has started to stay steady under 101.45 on Monday morning after its significant drop off last week, where it lost 0.66%. The pair is down 1.7% for the past three months, the second straight quarter of decline.

The greenback was under some pressure on Thursday after US consumer spending data disappointed, rising by just 0.2% in May, missing market expectations of 0.4%. The yen strengthened after Japan recorded stronger-than-expected May retail sales and investors moved to the currency and Treasuries amid concerns over the global outlook.

Little impact from missed May production forecast

Based on preliminary figures, Japan May industrial output rose 0.5% on month, missing market estimates of 0.9%, but still improving from -2.9% in April. The news had little immediate impact on USD/JPY, but has started to drift toward its support level of 101.35.

The pair could extend its decline depending on data ahead this week, such as if Thursday’s US employment figures will be weak. Japan will be releasing its Tankan manufacturing and non-manufacturing index tomorrow, and services PMI on Thursday.

Asian currencies have generally performed pretty well this past quarter against the greenback. South Korea was the best performer, gaining 5 percent against the US dollar.

Ahead of the Singapore Open

The tech space could get some attention after Chinese Internet giant Tencent grabbed some headlines with its $736 million purchase for a 20% stake in Craigslist-like 58.com. The Hong Kong-listed Tencent in March had also bought a 15% stake in e-commerce firm JD.com, which competes with Alibaba in the same space.

Malaysia’s KLCI Index looks to be losing steam and looks to snap what has been the world’s longest-running equity rally. It’s headed for its smallest first-half return since 2008, according to Bloomberg data.

We are calling for the MSCI Singapore to open 0.85 points higher at 371.90.

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