Yen takes a dive along with the Japanese economy

Wednesday, April 1, 2009


The Yen fell to a three-week low against the US Dollar and took a beating from other major currencies Tuesday after weak economic data out of Japan stifled recent safe-haven flows into the Japanese currency. Ahead of the highly anticipated G20 meeting in London this coming Thursday, newly released data has shown that the economic crisis has destroyed Japanese exports and is responsible for a sharp contraction in the fourth quarter. This reality is threatening to collapse the current government.

At 8:15 PM GMT, the Yen was trading down 2% to the US Dollar to 99.06, down 2 1/2% to the Euro to 131.62, down 2.6% to the British Pound to 142.01 and down 3.4% to the Australian dollar to 68.8.


Aside from the jump it took against the Yen, Gains in the Euro were limited as investors awaited the European Central Bank policy meeting on Thursday. There is a lot of uncertainty with how the meeting will go, given the many developments in recent days over monetary policy. German Chancellor Angela Merkel has been outspoken against additional stimulus spending while ECB President Jean-Claude Trichet has alluded to a more aggressive policy. Nonetheless, The ECB is expected to cut rates half a percentage point to 1 percent and possibly signal plans for some form of unconventional policy such as buying bonds to boost the money supply.

At 9:00 PM GMT, the Euro was trading up 1/2% to the dollar to 1.3269, flat to the GBP to .9246 after trading up 3/4% most of the day, up 1/2% to the Canadian Dollar to 1.6738 and down 1.19% tot the Australian Dollar to 1.9139.

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