News Column

Dollar stays at lower 102 yen despite Japan GDP drop

August 12, 2014

The U.S. dollar stayed in the lower 102 yen zone Wednesday morning in Tokyo with traders not blinking at a sharp contraction in the Japanese economy in the first quarter of fiscal 2014.

At noon, the dollar fetched 102.28-29 yen compared with 102.21-31 yen in New York and 102.28-29 yen in Tokyo at 5 p.m. Tuesday.

The euro was quoted at $1.3365-3365 and 136.70-71 yen against $1.3365-3375 and 136.65-75 yen in New York and $1.3366-3368 and 136.71-75 yen in Tokyo late Tuesday afternoon.

Japan's gross domestic product shrank an annualized real 6.8 percent in the April to June quarter, falling at its fastest pace since the January-March quarter of 2011 when the country was hit by the massive quake and tsunami, the government said Wednesday.

A 3-percentage-point consumption tax hike on April 1 dealt a blow to the country's economy, with personal consumption falling 5.0 percent on quarter.

Currency trading gave a muted reaction, however, as the fall in GDP was mostly in line with economists' forecasts, dealers said.

"Consumption does seem a bit weak, but overall it's not enough to change market views on the economy for the July-September quarter onward or the Bank of Japan's outlook for the economy," said Shinichiro Kadota, foreign exchange strategist at Barclays Bank.

The euro was steady against the dollar and the yen in Tokyo trade, having inched back up from a fall against both currencies overnight on a weak reading of economic sentiment in Germany in August.

The German ZEW indicator fell for the eighth straight month to reach the lowest level since December 2012, adding to signs the European economy is struggling in its recovery.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Japan Economic Newswire

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters