Japanese Yen Weak as Trading Starts with Optimism

The Japanese yen was very weak today, demonstrating significant losses against all other most-traded currencies. Analysts explained the weakness by the market sentiment that was favorable to riskier currencies. Japan’s better-than-expected macroeconomic reports added to the traders’ optimism.
Japan’s Cabinet Office reported that gross domestic product rose by 3.0% in the fourth quarter of 2020 after expanding by 5.3% in the previous three months. That was a better reading than a 2.4% increase predicted by analysts. Year-on-year, GDP rose by 12.7%. That was a far bigger increase than the 9.5% predicted by economists.
According to a revised report from Japan’s Ministry of Economy, Trade, and Industry, industrial production fell by 1.0% in December after declining by 0.5% in the preceding month. While not a good reading by itself, it was better than market expectations and the preliminary estimate of a 1.6% drop.
Beyond the positive data from Japan, the yen was under pressure from the positive general market sentiment. Analysts explained the traders’ good mood by the positive outlook for vaccine rollouts and fiscal stimulus in various countries across the world, particularly in the United States.
USD/JPY gained from 104.90 to 105.28 as of 11:57 GMT today, reaching the high of 105.42 intraday. EUR/JPY was up from 127.17 to 127.73, and its daily high was at 127.97. GBP/JPY rallied from 145.21 to 146.40.
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Original from: www.earnforex.com