Japanese Yen Eases From 5-day High Against US Dollar
Monday during early Asian deals, the yen showed weakness against the European currency, the British pound and the Swiss franc as the Japanese economy expanded for a second consecutive quarter, boosting demand for higher-yielding currencies. Meanwhile, the yen eased from a 5-day high against the US dollar.
Japan’s economy expanded 1.2 percent in the third quarter of 2009 compared to the previous three months, the Cabinet Office said today, marking the fastest growth since the first quarter of 2007.
It also was sharply higher than the 0.7 percent increase that had been forecast after the revised 0.7 percent quarterly gain in Q2.
On an annualized basis, real gross domestic product surged 4.8 percent – again shattering expectations for a 2.9 percent increase following the revised 2.7 percent gain in the second quarter.
The data prompted an official response from the government that stated that the GDP figure shows that the Japanese economy is recovering. It added that it was unlikely that Japan could enter into a period of deflation, although it would be necessary to continue to carefully monitor the situation.
Against the US dollar, the Japanese yen lost ground after hitting a 5-day high of 89.40 during early Asian deals on Monday. At 10:05 pm ET, the yen declined to 89.72 against the dollar, compared to 89.70 hit late New York Friday. The next downside target level for the yen is seen around 90.87.
The Japanese unit that closed Friday’s North American session at 133.81 against the European currency climbed to 133.60 during Monday’s early Asian deals. Thereafter, the yen reversed its direction and is currently trading at 134.03 against the euro with 135.0 seen as the next target level.
The Japanese currency that hit a high of 149.25 against the British pound during today’s early Asian deals weakened thereafter. At 10:30 pm ET, the yen was quoted at 149.75 against the pound, compared to Friday’s closing value of 149.71. If the Japanese yen falls further, 151.2 is seen as the next target level.
The average asking price for a home in the United Kingdom was up 1.6 percent on year in November, property Web site Rightmove said today, coming in at 226,440 pounds.
It marked the highest annual increase in 18 months following the 0.2 percent on year gain in October. A year earlier, home prices had fallen an annual 2.9 percent.
On a monthly basis, prices were down 1.6 percent after the 2.8 percent spike in the previous month.
The yen showed weakness against the Swiss franc during early Asian deals on Monday. The yen that closed Friday’s New York deals at 88.68 is now worth 88.78. On the downside, 89.4 is seen as the next target level for the Japanese currency.
In the European session today, the Italian CPI and the current account reports are due for release.
Across the Atlantic, the U.S. empire manufacturing index for November, retail sales for October and business inventories report for September are expected.
