The Japanese Yen has weakened to a three-year low against the Euro and fell against the majority of its most traded peers after a government report showed that the nation’s trade deficit rose more than economists had forecast in April.
The weaker-than-expected data highlights the challenges confronting the world’s third-biggest economy as weak demand from Europe and China proves to be a hurdle to a strong economic recovery.
The 3.8% annual increase in exports was below economist predictions of a .9% rise following the 1.1% increase recorded in March. The data also highlights that the weakness of the Yen has not been the cure all for the still relatively stagnant Japanese economy. The weak Yen in theory should have helped to boost exports but due to the ongoing Euro crisis and revelation that most of the data coming out of China has been greatly exaggerated this has not yet proven to be the case.
“The yen’s weakness has pushed up values of both exports and imports, but the benefits from a weak yen have not appeared in export volumes yet,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.
“The economy is expected to stay on a moderate recovery path. It will be difficult to picture the economy being led by external demand. Instead, it will probably be supported by fiscal policy.”
Exports to China rose by just 0.3% on a year-by-year basis in April, up for a sixth straight month, but it was far below the 6.7% expected by economists.
The Bank of Japan maintained interest rates at 0.10% at its rate decision early on Wednesday morning.
Current Japanese Yen (JPY) Exchange Rates:
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 102.6516
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 155.4795
The Euro/Japanese Yen Exchange Rate is currently in the region of: 132.7484
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 83.6686
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 100.4149
(Correct as of 09:45am GMT)
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