News Column

Yen Recovers After Better Than Expected Japanese GDP Data

August 12, 2014

BRUSSELS (Alliance News) - The Japanese yen recovered against most major currencies and held steady thereafter in the Asian session on Wednesday after data showed that Japan's gross domestic product contracted at a slower than estimated annual rate in the second quarter of 2014.

Data from the Cabinet Office showed that Japan's GDP contracted 6.8% on year in the second quarter of 2014.

The headline figure was not worse as the 7.1% decline expected by economists and followed the downwardly revised 6.1% expansion in the first quarter (originally 6.7%).

The reading marked the country's worst decline since the earthquake and tsunami in 2011, due in large part to a sharp decline in consumer spending following the implementation of a consumption tax hike in April.

On an annualized quarterly basis, GDP dipped 1.7% - a smaller drop than the 1.8% contraction forecast. This followed the downwardly revised 1.5% increase in the previous three months.

Meanwhile, minutes from the central bank's recent meeting showed that members of the Bank of Japan's Monetary Policy Board see the domestic economic recovery as remaining on track.

The monetary policy put in place is having the intended results, the bank added - although a decline in demand has been observed following the consumption tax increase.

The yen rose to 136.60 against the euro, 171.77 against the pound and 112.59 against the Swiss franc, from early lows of 136.75, 171.94 and 112.72, respectively and held steady thereafter.

Looking ahead, German consumer price index and wholesale price index for July are due to be released.

The UK jobs data and the results of ZEW's Swiss economic expectations survey for August are due to be released.

At 5:30 am ET, the Bank of England is due to release its inflation report and Governer Mark Carney, along with other MPC members, hold a press conference on the inflation report in London.

In the New York session, the US retail sales data for July and business inventories for June are due to be released.

At 9:05 am ET, Federal Reserve Bank of New York President William Dudley will deliver a speech at a conference on the risks of wholesale funding in New York.

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

Source: Alliance News

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters