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Yen Strengthens on Positive Japanese Data
The Yen rallied against all the major currencies last week. The Yen's most remarkable appreciation was against the Pound, as the GBP/JPY pair dropped close to 400 pips. The Yen also saw rising trends against the Dollar and the Euro.
It seems that the main reason for the Yen's strengthening is the positive data from the Japanese economy. The Preliminary Gross Domestic, which measures the change in the inflation-adjusted value of all goods and services produces by the economy, rose surprisingly by 1.2%. The unexpected rise showed that the Japanese economy might be doing better than estimated by analysts. The Yen is relatively quite strong, yet for as long as the Japanese economy will show signs for recovering, the Yen is likely to rise further. Also last week, the Bank of Japan decided to leave the Japanese Interest Rates at 0.10%, the lowest rate in the industrial world. However, this had a muted impact over the Yen, probably due to the fact that all the other major economies have also prevented hiking rates so far.
Looking ahead to this week, many impacting news events are expected from the Japanese economy. The economic publication which might have the strongest influence on the market looks to be the Trade Balance scheduled for Tuesday. The Trade Balance measures the difference in value between imported and exported goods. Considering that the Japanese economy relies greatly on its export, a positive figure has the potential to boost the Yen.
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