14 November, 2013
The yen weakened during the Asian session against most major counterparts as markets reacted to comments made by Japanese Finance Minister Taro Aso today.
Relatively good economic data from Japan did not help the yen rise. A GDP report showed the Japanese economy expanded at an annualized pace of 1.9% in the third quarter, surpassing expectations for a 1.7% growth. However, compared to the first and second quarters, growth was slower.
Market participants were more concerned about Taro Aso’s remarks which hinted that more policy easing was possible, which tends to have a weakening effect on the yen
USDJPY rebounded from its decline in the US session, and rose in Asia to a high of 99.71 and ended the session with a 0.43% gain at 99.65.
Meanwhile the dollar which had weakened against the euro and pound in the US session was able to make up for losses. The dollar had fallen late in the US session yesterday in reaction to the dovish tone of the written testimony of Janet Yellen, the new Fed Chief as from January 1st.
Yellen will be speaking to the US Senate Banking Committee later today. She is expected to remain dovish after her written text released yesterday showed that she still thinks the US economy is weak and the Fed’s assistance is still required to boost growth. She added that unemployment remains high and that inflation is expected to remain below the Fed’s 2 % goal.
The sell-off in the US dollar after Yellen’s test last night helped lift the euro late in the US session, which hit a high of 1.3496 just before the Asian session began. It eased lower in Asia to end 0.14% down at 1.3462. The pound fell 0.11% in Asia to 1.6039.
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