Yen Gains as Demand for Safe Havens Surge

[ad_1]

So far this week, the Japanese yen has advanced 0.64 percent against the US dollar, continuing with a three-week gaining streak.

Advertisement

The yen is a popular asset during turbulent times.

The demand for safe-haven currencies has increased lately as coronavirus cases continue increasing in places like Europe and the United States. In Japan, the total number of reported coronavirus cases topped 100,000, as cases continue surging on the island and amid the reopening of the economic activity.  More than  1,700 deaths have been linked to the virus. Globally, 44,878,011coronavirus cases have been reported as well as 1,180,914 total deaths.

On Sunday, the Bank of Japan published the corporate Service Price Index, which measures the prices of services that are traded by companies. The index stood at 1.3 percent in September (year-to-year), after climbing by 1.1 percent in the previous month. On Monday, the Cabinet office reported that the Coincident Index stood at 79.2 after being at 78.3 in July. August’s Leading Economic Index stood at 88.4 after being at 86.7 in the previous month.

On Wednesday,  the Ministry of Economy, Trade, and Industry reported that retail trade dropped by 8.7 percent (year-to-year), after going down by 1.9 percent in August, and worse than what the analysts expected, as they foresaw it to go down by 7.7 percent. Large Retailers’ Sales dropped by 13.9 percent in September, after decreasing by 3.2 percent in August.Yen gains

On Thursday, the Bank of Japan announced its decision to leave the cash rates unchanged, remaining in line with the analysts’ expectations. In its report, the bank downgraded its economic growth and inflation forecasts.

The outlook, according to the report, remains uncertain. The GDP is expected to contract by 5.5 percent by the end of the current fiscal year, higher than the previously estimated. Next year, the economy is expected to go up by 3.6 percent, better than previously expected. The bank foresees consumer prices to fall by 0.6 percent, a higher contraction than previously expected, which will probably feed the concerns for too low inflation levels.

“Japan’s economy will likely improve as a trend as the impact of the coronavirus pandemic gradually subsides, though the pace of recovery will be moderate,” stated the bank in its report.

The Japanese economy could contract by 5.5 percent by the end of the current fiscal year, which is higher than previously expected. Nevertheless, next year’s recovery is expected to be more pronounced, as the Gross Domestic Product could increase by 3.6 percent.

The Prime Minister, Yoshihide Suga said that he would push for “budgetary steps” to aid Japan’s economic performance. This boosted the expectations for a third budget, which could be announced by next week.

The third budget is very needed, at least according to the surveyed analysts, given the enormous impact of the pandemic on the Japanese economic performance. The Japanese government already pledged to spend around 2.2 trillion dollars on fiscal aid. If approved, an additional $95.51 billion package could be implemented, though the amount is yet to be decided.

[ad_2]

Leave a Reply

Your email address will not be published. Required fields are marked *

Risk warning: Trading in Contracts for Difference (‘CFDs’) carries a high level of risk and can result in the loss of all your investment. As such, CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever. For more information about the risks associated with trading CFDs please find and read our ‘Product Disclosure’.


Please recognize that this website is the only official website, please do not enter other clone websites through Internet search or advertisements.


© 2011 - 2024 mgtinvesting.com. All Rights Reserved.

en_USEnglish