CANBERA (Alliance News) - The Japanese yen extended rally against its most major rivals in European deals on Monday, as European stocks fell on fears that Chinese economy is slowing more than predicted, and its impact on global growth.
Concerns over slowing growth in China spurred panic selling across the globe, and investors became nervous that the country's central bank would move to weaken its currency over time to boost sagging exports.
Oil prices also extended their sell-off, amid concerns that China's slowdown would curb demand, in an oversupplied market.
Speaking at Parliament, Japanese Prime Minister Shinzo Abe acknowledged that the sharp fall in oil prices makes it difficult for the Bank of Japan to attain its 2% inflation goal.
"I understand the BOJ's explanation that achieving the target has, as a matter of fact, become difficult under these circumstances," Abe told.
In other economic news, final figures from the Cabinet Office showed that Japan's leading index rose less than initially estimated in June.
The leading index was revised downward to 106.5 in June from the preliminary estimate of 107.2. In May, the score was 106.0.
The yen has been trading in a positive territory in the Asian session.
In European trades, the yen advanced to 119.53 against the US dollar for the first time since May 18. This is up by almost 2% from last week's closing value of 122.01. The yen is likely to challenge resistance around the 118.00 zone.
The yen appreciated to a 2-1/2-year high of 90.20 against the loonie, 2-year highs of 86.47 against the aussie and 78.46 against the kiwi, up from Friday's closing values of 92.51, 89.26 and 81.54, respectively. On the upside, the yen may possibly face resistance around 89.00 against the loonie, 85.00 against the aussie and 77.5 against the kiwi.
The yen climbed to a 1-1/2-month high of 188.14 against the pound and a 4-day high of 137.64 against the euro, off early lows of 191.50 and 138.98, respectively. The yen is seen finding resistance around 187.00 against the pound and 136.00 against the euro. The yen was trading at 191.48 against the pound and 138.83 against the euro at last week's close.
The yen reversed from an early more than a 3-week low of 129.06 against the Swiss franc, advancing to a 5-day high of 127.33. The pair held steady shortly thereafter. On the upside, 126.5 is possibly found as the next resistance level for the yen.
Looking ahead, the Federal Reserve Bank of Atlanta President Dennis Lockhart is expected to speak at the 2015 Public Pension Funding Forum, in Berkeley, California.
