The yen plunged against most of its 16 major counterparts as economic data indicated Japan’s trade deficit increased more than expected in March.
The dollar stood firm to maintain its strongest weekly gains in a month against the euro and the yen as market speculated that the Federal Reserve may phase out the stimulus in 2014 owing to recent positive economic indicators in the United States.
The yen plunged 0.1 percent to 102.53 per dollar as of 8:15 a.m. in London since April 18. It also plunged 0.2 percent to 141.74 for each euro. The dollar was trading at $1.3825 per euro, down from $1.3813 after earlier surging 0.5 percent over the week.
“Japan’s trade deficit was much larger than expected, so it helped to push the yen lower,” Marito Ueda, a Tokyo-based senior managing director at FX Prime Corp, told Bloomberg. “We’re likely to shift to a dollar strength story from a yen weakness story going forward as we start to see good data from the U.S.”
The Japan’s trade deficit increased to 1.45 trillion yen ($14.1 billion) last month, up from 802.5 billion yen in February, reported the Ministry of Finance on Monday. A Bloomberg survey of economists had forecasted a deficit of 1.1 trillion yen. Nonetheless, the figure was less than the record shortfall of 2.8 trillion yen in January.
The decline in Japan’s exports was mostly due to weaker shipments to China, which rose 4.3 percent on annual basis in March, down from an increase of 27.6 percent in February.
Currently, U.K., Hong Kong, Germany, New Zealand and Australian financial markets are some of those closed for the Good Monday holiday today. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at firstname.lastname@example.org