The Japanese Yen exchange rate continues to weaken against the US Dollar and the majority of its peers after the Asian nation posted a record trade deficit and Japan’s deputy economy minister said that a hundred Yen to a Dollar would not prove to be a problem.
The record high deficit comes as exports to Europe and China continued their rapid decline. The recession hit Eurozone has reduced its imports as it struggles to return to growth. The continuing military and political standoff with China over a set of Islands in the South China Sea has led to many Chinese boycotting Japanese goods.
As a result the trade gap rose to 6.9 trillion Yen ($78bn,£49bn) for 2012.
Analysts said the deficit may have bottomed out, as exports are expected to improve in coming months.
“As exports pick up due to gradual recovery in the global economy, Japan’s trade deficit is likely to shrink in the coming months, Although it is unlikely to swing to a surplus this year as the export recovery will be modest and imports are likely to remain high due to elevated oil import costs.” said Tatsushi Shikano, from Mitusbishi UFJ Morgan in Tokyo.
According to the latest data Japanese exports have fallen for seven-months in a row with shipments dropping by 5.8% in December alone.
The weakening of the Yen is part of the new government’s plans to kick-start the struggling Japanese economy. “The current level around 90 can be said to be a correction of the strong yen, but it isn’t over yet,” Yasutoshi Nishimura said in an interview. He said a level of 110 to 120 would raise import costs, echoing the view of Abe’s adviser Koichi Hamada and suggesting that the government won’t back a currency free-fall.
These exchange rates were correct as of 09:50 pm
The Japanese Yen to Pound Sterling exchange rate is currently trading at 0.0070
The Japanese Yen to US Dollar exchange rate is currently trading at 0.0111
The Japanese Yen to Euro exchange rate is currently trading at 0.0083
The Japanese Yen to Australian Dollar exchange rate is currently trading at 0.0106
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