News Column

Yen Strengthens After Japan Current Account, Trade Data

July 7, 2014

OTTAWA (Alliance News) - The yen firmed against the other major currencies in Asian deals on Tuesday, as data showed that the nation's trade deficit shrank and current account surplus rose more than expectations in May.

Data from the Ministry of Finance showed that Japan posted a current account surplus of 522.8 billion yen in May, topping forecasts for a surplus of 429.9 billion yen, after posting 187.4 billion yen surplus in April.

The trade balance reflected a deficit of 675.9 billion yen - also beating expectations for a shortfall of 822.5 billion yen following the 780.4 billion yen deficit in the previous month.

Exports were up 2.0% on year to 5.718 trillion yen, while imports eased 0.4% to 6.394 trillion yen. Overall bank lending in Japan was up 2.3% on year in June, the Bank of Japan said - standing at 476.152 trillion yen.

That beat forecasts for 2.2%, which was unchanged from the May reading following a downward revision from 2.3%.

The yen strengthened to 138.37 against the euro, setting an 8-day high, and a 6-day high of 101.68 against the greenback. On the upside, the yen may possibly face resistance around 137.5 against the euro and 100.00 against the greenback. The yen ended Monday's trading at 138.56 against the euro and 101.85 against the greenback.

The yen advanced to a session's high of 113.85 against the Swiss franc and held steady thereafter. The next possible resistance for the yen is seen around the 113.00 zone. At Monday's close, the pair was quoted at 113.96.

The yen climbed to a 6-day high of 174.25 against the pound before moving off slightly thereafter. The pound-yen pair was worth 174.42 when it closed deals on Monday.

The yen rose to a weekly high of 95.18 against the loonie shortly after the data and stabilized in subsequent deals. At Monday's close, the pair was quoted at 95.31.

Looking ahead, Switzerland's CPI for June, German current account and trade data, Swiss retail sales and UK industrial production- all for May are due in the European session.

At 3:00 pm ET, US consumer credit data for May is set for release.

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Source: Alliance News

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