Yen up against dollar after poor Japan GDP

data
By AFP
November 17, 2014 - Updated 1116 PKT
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TOKYO: The yen climbed against the dollar in Asia Monday after briefly hitting a sevenyear low in response to data showing Japan had slumped into recession.

In Tokyo, the dollar rose above 117 yen for the first time since October 2007 just minutes after
the official figures were released, before tumbling below 116 yen.

It was the biggest jolt to the yen since the Bank of Japans widened its monetary easing
programme on October 31.

In afternoon trade the greenback bought 115.65 yen, compared with 116.26 in New York Friday
afternoon.

The euro weakened to 145.11 yen from 145.66 yen in US trade, while it firmed to $1.2547 from
$1.2523.

Japans surprisingly poor third-quarter GDP data sent Tokyos Nikkei plunging 2.96 percent,
with the negative sentiment prompting a move to the yen, which is seen as a safe-haven currency
in times of uncertainty.

The dollar-yen rate has jumped sharply over the past two months and "all factors (to push the yen
down) are out now," said Daisuke Karakama, head of currency spot trading at Mizuho Bank.

Japans gross domestic product shrank 0.4 percent in the July-September quarter, or an
annualised rate of 1.6 percent, as a tax rise earlier this year hammered consumer spending.

Analysts said the data made it almost inevitable that Prime Minister Shinzo Abe will delay a
fresh sales tax hike and call snap elections to bolster his power against party rivals ahead of a
leadership vote due next year.

Karakama noted, however, that a snap election was likely to happen "no matter what the
numbers were".

"The overall story has not changed since last week," he added.

The dollar was mixed against other Asia-Pacific currencies.

It weakened to 1,095.07 South Korean won from 1,099.33 won on Friday, to 32.78 Thai baht
from 32.85 baht, to 44.88 Philippine pesos from 44.93 pesos, and to 12,195.80 Indonesian rupiah
from 12,217.30 rupiah.

The dollar rose to 61.71 Indian rupees from 61.64 rupees, to Sg$1.2953 from Sg$1.2940, and to
Tw$30.67 from Tw$30.64.

The Australian dollar strengthened to 87.82 US cents from 86.90 cents, while the Chinese yuan
was unchanged at 18.89 yen.

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