The error message "Permission denied" pretty clearly indicates what goes wrong here:
Somehow the server setup is mangled up, meaning that the user ID under which the workflow is executing doesn't have permission to access that particular target directory and to create files there.
Please work with your admin team to investigate the permissions of that user ID for and in that directory path.
One typical mistake causing such errors is if the user ID doesn't have x permission (execute permission) and r permission (read permission) on each and every directory in the directory path (assuming PowerCenter runs on Unix/Linux here).
Thanks for your quick response. Workflow was executed using my id i.e user1, My id (user1) doesn't have write permissions in target file dir, but at Linux server level file will created using PowerCenter services PCuser.
Pc user has all permission in rwx in Directory
You've written that the target definition has a file name port. In this case the session parameter $Filename doesn't make any sense at all. Just key in some dummy file name, it will be created empty and will remain empty (because the "real" file name is given via the file name port).
It may well be that the file system on which this directory is stored doesn't allow file names to start with a dollar sign and that this is the reason.