Yen Drops Prior To Japan GDP Data

By TraderVox.com

Tradervov.com (Dublin) – The Japanese currency dropped against most of its counterparts prior to the release of GDP data next week expected to show the country’s economy contracted in the third quarter. This has added to speculations that Japanese economy is lagging behind major economies such as US and China.

The yen pared a two-day gain against the euro after reports from China showed that the country’s industrial production was more than expected. The Australian dollar strengthened as Asian stocks improved in the market. Euro’s advance was limited as European Union officials were reported to have indicated that funds for Greece might take some time before they are made available.

Huns Kunnen, the chief economist in Sydney at St. George Bank Ltd, predicted that the Japanese currency will continue to weaken. He noted that the Japanese economy is troubled and there is no domestic impetus to push the demand for the yen. The market is expecting the Japanese gross domestic product to have contracted by 3.4 percent in the third quarter. The data will be released on November 12.

Masashi Murata, a Tokyo-based currency strategist at Brown Brothers Harriman & Co, the three major currencies, the dollar, euro and yen, are at a stand-off and there might lack a clear gainer as the Japanese economy is on a downward trajectory. Recent data from China indicated that industrial production in the country added 9.6 percent, higher than the market expectation of 9.4 percent. Retails sales also gained more than expectation, coming in at 14.5 in October. The market was expecting a 14.4 gain.

The yen dropped against the euro by 0.3 percent to 101.62 at the close of trading yesterday in London. It dropped by 0.1 percent against the dollar to trade at 79.53 yen. The 17-nation currency advanced against the dollar by 0.2 percent to trade at $1.2777. The Australian dollar advanced by 0.2 percent against the greenback to exchange at $1.0426.

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