Rupee opened little changed, Yen weaker vs. Dollar

Friday,   26-Apr-2024   10:01 AM (IST)

The Indian rupee opened the day little changed at 83.30/31 levels compared to its previous close at 83.3150/3250 levels despite a pick-up in U.S. inflation which spurred a rise in U.S. Treasury yields and further reduced the likelihood of imminent Federal Reserve rate cuts. The losses in other Asian currencies were moderate, with most down just about 0.1%. Indian government bond yields rise in early trades tracking a spike in U.S. yields, as investors continue to pare rate easing hopes. India's benchmark indexes opened higher led by information technology stocks, which were boosted by Tech Mahindra after it unveiled a turnaround plan, while a fall in shares of Bajaj Finance after its quarterly results capped gains. At 9:18 AM, the S&P BSE Sensex was trading at 74,408 up 69 points, while the broader Nifty50 was at 22,593 up 23 points. As per the technical indicators range for the USDINR pair may be 83.20-83.50 levels. Rupee has an immediate support at 83.38 levels. A breach of the same may see rupee at 83.45 followed by 83.52 levels. On the positive side rupee is likely to face resistance at 83.26 levels and if it is able to break the same then it may gain up to 83.18 levels followed by 83.12 levels.

The yen hit its weakest in three decades against the U.S. dollar after the Bank of Japan left interest rates on hold on Friday, keeping traders on edge as to when and to what degree authorities in Tokyo may intervene. The yen fell by about 0.2% and weakened to 156.1 per dollar in the minutes after the announcement. The yen also nudged down to its weakest almost 16 years at 167.38 per euro and its weakest in nearly a decade on the Australian dollar. The Bank of Japan left its short-term interest rate target at 0-0.1% and projected inflation to stay around 2% over the next three years. Markets had not expected any policy change, so moves were modest and focus now falls on Governor Kazuo Ueda's tone and outlook at his news conference at 3.30pm in Tokyo (0630 GMT). The yen's 9% drop against the dollar this year is the largest fall of any G10 currency, driven mostly by the wide gap between U.S. and Japanese government bond yields, which is more than 375 basis points at the 10-year tenor. The yen has slipped past levels at 152 and 155 to the dollar where traders had been wary of pushback or intervention from Japan though markets remain on high alert for official buying. Japanese Finance Minister Shunichi Suzuki said on Friday he was closely watching currency moves and prepared to take full steps in response. Elsewhere the dollar had dipped on softer-than-expected U.S. growth data, even as Treasury yields rose on a hotter-than-expected inflation indicator. The euro rose 0.3% on Thursday to a two-week high of $1.0728 following data showing the U.S. had grown at its slowest pace in nearly two years in the first quarter. The annualised rate of 1.6% missed economist forecasts for 2.4%.