The Japanese yen opened sharply higher due to risk aversion caused by terrorist attacks in France. Yet the currency pared back gains after data released on Monday showed that Japan’s economy slipped into recession.
According to the preliminary estimate, Japan’s gross domestic product contracted 0.2 percent in the third quarter of this year compared to the predicted fall by 0.1 percent. GDP shrank during the previous three months as well, meaning that the Japanese economy has entered recession. This increases chances for additional monetary easing from the Bank of Japan — not a positive prospect for the yen.
USD/JPY opened at 122.24 after closing at 122.65 on Friday but jumped to 123.10 as of 16:50 GMT today. GBP/JPY traded at 187.09 after closing at 186.81 on Friday and opening at 186.19 today.
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