USD/JPY Rises as China Beats Forecasts

The yen declined for a third day versus the dollar as a report showed China’s economy grew faster than analysts estimated, damping demand for haven assets.

The Japanese currency fell against all but one of its 16 major counterparts. The euro headed toward its lowest level in more than 11 years versus the greenback before the European Central Bank, led by Mario Draghi, meets this week with economists saying policy makers may announce a sovereign-bond buying program. Malaysia’s ringgit slid after the government said its budget deficit will be wider than initially targeted. The Swiss franc strengthened against 15 of its 16 major peers.

“There’s some relief that the Chinese data wasn’t as bad as some people were thinking,” Jane Foley, a senior strategist at Rabobank International in London, said, referring to the yen’s decline. “I would imagine whatever Draghi says on Thursday will be orientated at keeping the euro weak. Draghi is a markets man and he usually gets the market to behave as he wants.”

The yen depreciated 0.9 percent to 118.60 per dollar as of 8:38 a.m. New York time. The euro dropped 0.1 percent to $1.1598 after sliding to $1.1460 on Jan. 16, the weakest level since November 2003. It gained 0.8 percent to 137.55 yen.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza