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Japan gets its Wish of Weak Yen

After the tsunami that struck Japan and sent the currency to its strongest level in months government and exporters were in agreement a weaker Yen was a desired outcome. Now that it has come to pass it is not seen a blessing as that same tsunami that strengthened the Yen also crippled the countries Nuclear power production.

The Yen is now weaker but as the price of Oil, a natural substitute of nuclear energy, is on the rise (and denominated in U.S. Dollars) Japan once a trade superavit juggernaut is on the back foot as the positive impact of exports is overshadowed by the amplified negative impact of imports.

China continues its breakneck pace, albeit it has slowed down in the last month in part due to seasonal trends, but still continues to post positive figures. Industrial output grew 11.4 percent when compared to 2011. The forecasts were not met (12.4%) which has raised some concerns. Inflation was down following the Lunar New Year celebrations that impacted food prices in January (10.5 percent) compared to February (6.2 percent).

Below are some other highlights of the week:


Asia

AMERICAS Week in FX [1]

EUROPE Week in FX [2]

 

WEEK AHEAD

  • Monetary policy announcements continue from JPY, CHF and USD
  • Economic and consumer sentiment is delivered from Germany and USD
  • USD is busy with Inflation Indicators and Retail Sales Data
  • Job data is released in GBP and USD
  • USD’s Philly Fed Manufacturing Index is reported near weeks end

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell [7]

Vice-President of Market Analysis at MarketPulse [8]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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