The Japanese yen dropped today as it followed the US dollar in reversing Friday’s gains. Economic data from Japan was another reason for the currency to fall as indicators disappointed economists.
Japan’s gross domestic product rose 0.4 percent in the fourth quarter of 2014. While the reading was not terrible by itself, showing that the economy emerged from recession, it was not as good as the preliminary estimate and economists’ expectations. The current account was also a bit disappointing as its surplus was not as big as analysts predicted.
While the economic data might have played a role in the yen’s drop, it looks like for the most part the Japanese yen simply followed the dollar in decline (although the US currency managed to gain on the yen itself) as traders were taking profit after the Friday’s gains of safe-haven currencies. It is still possible that the yen will resume its rally, profiting from the role of a haven as market participants are nervous ahead of the next week’s policy meeting of the Federal Reserve.
USD/JPY advanced from 120.82 to 121.25 as of 22:47 GMT today, trading near the highest level since December 8. EUR/JPY was up from 130.84 to 131.51 and GBP/JPY rose from 181.63 to 183.33, erasing the Friday’s gains completely.
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