News Column

Yen Weakens Despite Strong Japan GDP Data

June 8, 2014



CANBERA (Alliance News) - The yen weakened against the other major currencies in the Asian session on Monday despite revised GDP estimate released by Japan showing a bigger than initially estimated growth for the first quarter.

Japan gross domestic product for the first quater from January to March increased at an annualized rate of 6.7%, up from the initial figure and the estimate of 5.9%, the Cabinet Office said. The result, adjusted for price changes, marked the sixth straight quarterly expansion.

The GDP grew to 1.6% in the January-March period from the previous quarter.

Current account data from Japan'sMinistry of Finance also showed that the travel balance rose to a surplus for the first time since 1970 as foreign visitors outnumbered Japanese travelling abroad.

The rise in Japanese stocks weighed on the currency. The benchmark Nikkei 225 index is currently up 73.23 points or 0.49% at 15,150.51.

The yen fell to nearly 4-week lows of 140.08 against the euro, 172.52 against the pound and 95.92 against the Australian dollar, down from last week's closing quotes of 139.80, 172.12 and 95.57, respectively. If the yen extends its fall, it is likely to find support around 141.17 against the euro, 173.03 against the pound and 96.44 against the aussie.

The yen that ended last week's deals at 102.44 against the US dollar and 93.70 against the Canadian dollar fell to 4-day lows of 102.63 and 93.89, respectively. The next possible downside target for the yen is seen at 103.15 against the greenback and 94.21 against the loonie.

Against the Swiss franc and the NZ dollar, the yen fell to 114.88 and 87.35, from last week's closing quotes of 114.64 and 87.02, respectively. If the yen extends its downtrend, it is likely to find support around 115.68 against the franc and 88.03 against the kiwi.

Looking ahead, Japanese Consumer sentiment index and the results of Eco Watchers survey for May are due at 1:00 am ET. At 3:00 am ET, Reserve Bank of Australia governor Glenn Stevens is due to speak on financial regulation in San Francisco.

In the European session, Eurozone Sentix investor sentiment index for June is due to be released.

Later in New York trading hours, Canadian housing starts data for May is due at 8:15 am ET.



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Source: Alliance News


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