USD/JPY Back Above 1.18 after China GDP

The yen declined for a third day versus the dollar after a report showed China’s economy grew faster than analysts estimated, damping demand for haven assets.  The euro fell toward its lowest level in more than 11 years versus the greenback on speculation the European Central Bank will introduce quantitative easing at a policy meeting this week. China’s report on gross domestic product for the fourth quarter helped the Australian dollar pare earlier losses.

“Markets took Chinese data to be slightly stronger than expected,” said Shusuke Yamada, a foreign-exchange strategist at Bank of America Merrill Lynch in Tokyo. “That’s underpinning dollar-yen which is seen to have a firm correlation with risk sentiment.”

The yen fell 0.5 percent to 118.20 per dollar as of 11:25 a.m. in Tokyo from yesterday. The euro dropped 0.2 percent to $1.1588, after touching $1.1460 on Jan. 16, the weakest level since November 2003. It gained 0.4 percent to 136.96 yen.

Bloomberg

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