Japanese Yen Drops as Economic Data Remains Weak
Japanese yen continues to show weakness on the Forex market. With a measure of optimism returning to the markets and helping risk appetite, the yen is not needed as a safe haven. On top of that, weak economic data in Japan is also helping to keep the yen lower.
Part of the yen’s weakness today comes from optimism in the markets. Stress tests of Spanish banks last week showed that things aren’t as bad as expected, with banks needing almost 60 billion euros to recapitalize. The news is putting heart into traders, and reducing the need for safe haven.
However, the yen is also lower on its own economic data. Residential property construction in Japan dropped from July to August, and there have been manufacturing issues as well. It hasn’t been helping the Japanese economy that a recently strong yen has been making exports harder to sell, and that has been impacting Japanese companies.
For now, the yen is weakening with all of this pressure. The news is no doubt good from the standpoint of Japanese monetary policy makers, who prefer the weak yen for the edge it provides in global trade.
At 13:11 GMT USD/JPY has slipped a bit to 77.9470 from the open at 77.9450 and is off the earlier high of 78.0550. EUR/JPY is up to 100.7285 from the open at 100.1780. GBP/JPY is up to 125.9435 from the open at 125.9150.
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