Forex: USD/JPY – Yen drops briefly below 99.00

on Jun 10, 2013
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The upside retrace, which started on Friday just gone from two-year-lows at 94.98, has continued today.

The dollar’s rally has continued and the pair was one pip away from the 99.00 level in late European trade today. The trend remains slightly bullish with the quote around 98.63/66.
The yen is currently moving inversely to the Nikkei stock index, with last week’s fall in Japanese equities propping up the local currency.
Today though, Japanese stocks rose sharply in Asian trading, with the Nikkei benchmark index rising by almost five percent, its biggest rally in more than a week.

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Earlier today, Japan’s Ministry of Finance reported revised first quarter GDP growth of 4.1 percent, comfortably up on the preliminary estimate of 3.5. Also today, Japan’s current account surplus rose to a seasonally adjusted ¥850 billion, from ¥340 billion in April. Analysts had expected an increase to ¥390 billion.
The week’s first trading day started under the influence of Sunday’s mostly disappointing releases from China.

Chinese consumer price inflation slowed to an annualized growth rate of 2.1 percent in May, from 2.4 percent in April and beating expectations of a rise to 2.5 percent. On a monthly basis the index fell to -0.6 percent against 0.2 percent growth in May, worse than the expected -0.2 percent decline.
As well, Chinese industrial production rose by an annualized 9.2 percent in May (April 9.3 percent), disappointing expectations for a 9.4 percent increase, while retail sales data for May y/y matched expectations for a 12.9 percent increase (April 12.8).

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