The Japanese yen dropped from its recent gains against all of its 16 major peers including the US dollar and the euro after Japan’s current account widened in November.
The yen traded 0.3% lower at 103.39 yen against the US dollar at the time of writing, after touching 103.51 yen earlier in the day.
The USD/JPY currency pair opened the session 103.10 yen, dropping from previous gains of 102.86 yen, and the highest level since December 18, following the Federal Reserve (Fed) announcement to reduce its $85 billion monthly purchases by $10 billion.
The greenback marked a third-session decline against the yen on Monday, dragged lower by the disappointing non-farm payrolls data.
The yen dropped 0.32% to 141.19 yen against the euro. The EUR/JPY currency pair reached 141.46 yen earlier in the day, following the release from the Ministry of Finance. The yen later dropped from its previous gains against the shared currency.
The nation posted its current account balance for November, dropping more than analysts forecasted, according to the Ministry of Finance. Japan posted a record of 592.8 billion yen, after showing a deficit of 127.9 billion in the previous month.
A separate data released revealed the nation’s economy bought a new 1.48 trillion yen of dollar bonds in November. The data also revealed that investors in Asia increased holdings of dollar bonds for the fifth month in a row, while analysts predict the Bank of Japan will increase asset purchases this year.
“The current-account deficit is one of the reasons why yen won’t strengthen,” said Daisuke Karakama, a market economist in Tokyo “People are wondering when the BOJ will expand monetary easing, so yield differentials will only continue to widen between Japan and the U.S,” he added.
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