The Japanese Yen has strengthened against the US Dollar, breaking yesterday’s decline after the Japanese trade deficit narrowed by a larger margin than economists had been predicting.
The Yen has so far today made gains against all except one of its most traded peers. Against the Euro the Asian currency made a 1% gain after the single currency was harmed by gloomy economic data out of the Eurozone. The latest data out of France showed that business activity in the country shrunk at its fastest pace in four years, defying economist expectations for signs of an improvement. In more bad news for the Euro zone the latest German PMI data showed that the region’s largest economy saw declines in its manufacturing and service sectors in February.
Imports rose 11.9 percent in the year to February, a fourth straight increase but below expectations of a 15.1 percent rise, leaving the trade balance in a deficit for the eighth consecutive month.
The 777.5 billion yen ($8.14 billion) deficit was narrower than the 836 billion yen deficit expected by economists, but was still the largest on record for the month of February.
Exports to China tumbled by 16% due to the ongoing dispute between the two nations over a set of islands in the South China Sea. Trade to the USA meanwhile rose by 5.7% but exports to the EU fell by 10% as the ongoing Euro crisis continues to sap the spending power of countries.
Today also sees the new Governor of the Bank of Japan, Haruhiko Kuroda hold his first press conference since taking the job. The governor’s speech is set to be scrutinised by the markets for hints that he may opt to increase monetary easing measures.
Niels Christensen, chief currency strategist at Nordea Bank AB said “The new governor’s speech will be scrutinized and if he doesn’t hint at anything then there may be some disappointment for the market and the yen may strengthen.”
Comments are closed.