Japanese Economic Data Detrimental to Yen

Today’s economic data was rather detrimental to the Japanese currency, showing a decline of Japan’s economy, and the yen fell against the US dollar and versus some other currencies as a result. At the same time, the yen gained on few major rivals, including the euro.

According to today’s report from Japan, gross domestic product (preliminary) contracted 0.4 percent in the second quarter of this year after rising 1.1 percent during the preceding three months. It suggested that Japan’s economy is struggling despite the extremely loose monetary policy of the nation’s central bank. This in turn suggests that the Bank of Japan may be forced to implement even more accommodative measures — a very negative prospect for the yen.

USD/JPY was up from 124.18 to 124.32 as of 16:26 GMT today, though the currency pair retreated from the daily high of 124.56. Meanwhile, EUR/JPY dropped from 138.05 to 137.73.

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