Yen Gains Ahead of BOJ on Disappointing Current Account Print
- Yen gains as Japan reported a current account surplus of ¥612.7B, below expectations
- Japan’s trade balance narrows to -¥533.4B
- Exports rose 15.7% over last year, while imports climbed 14.1% annually
The Japanese Yen strengthened against the US Dollar as the Finance Ministry reported its first current account surplus in five months below expectations. Following the release, the Nikkei equity index fell by more than 1%, which suggests the gains for the Yen were due to a drive to safe-haven plays. The Japanese current account balance for February came in at ¥612.7B, slightly below forecasts of a ¥618.1B surplus. This data follows a persistent current account deficit that had widened to a record ¥1.589 trillion ($15.38 billion) in January.
Japan’s trade balance also narrowed to -¥533.4B from a reading of -¥2,345.4B in January. Exports were up 15.7% on the year, while imports climbed 14.1% compared to last year.
All eyes will be on the BOJ policy decision later today, as Board Officials will likely take into consideration the recent trade data and the effect of this month’s sales-tax hike on the economy. Economists widely expect the BOJ to maintain its current policy of expanding the monetary base by ¥60-70 trillion annually. Watch DailyFX Chief Strategist John Kicklighter explain the implications of the event for the Yen pairs here.
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USDJPY (5min chart) April 8, 2014 | Created with FXCM Marketscope