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Forex - USD/JPY jumps on retail sales news

Published 01/30/2013, 12:18 AM
Updated 01/30/2013, 12:19 AM
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Investing.com - The U.S. dollar continued to gain strength against the Japanese yen during Wednesday’s Asian on the heels of retail sales data out of Japan.

In Asian trading Wednesday, USD/JPY jumped 0.24% to 90.95 and traded as high as 91.03 earlier in the session. The 91 area is continuing to prove to be stiff resistance for the greenback against the Japanese currency.

Earlier Wednesday, Japan’s Ministry of Economy Trade and Industry said December retail sales there fell to a seasonally adjusted rate of 0.4% following an increase of 1.3% in November. Analysts had expected retail sales to fall at annual rate 0.3% in December.

The greenback’s strength against the yen could be a sign that traders are beting that yet another discouraging Japanese economic could open the door for swifter monetary easing. Earlier this month, the Bank of Japan disappointed financial markets when it committed to Fed-style asset-buying, but BoJ said it would not launch that program until 2014.

While the tumbling yen is viewed as a positive for Japanese exporters, it can have the opposite effect for multinationals doing business in Japan. With U.S. companies in the middle of earnings season, some marquee names have cited increased currency volatility as a reason for lower profits. That list includes some firms that do significant business in Japan including Coach (NYSE: COH) and McDonald’s (NYSE: MCD).

On Wednesday, Japan’s Finance Minister Taro Aso said policymakers there are not manipulating the yen, but the weaker Japanese currency further stokes the fires of possible global currency wars as companies from China to the U.S. to Germany could be adversely impacted by the weaker yen.

Elsewhere, EUR/JPY rose 0.18% to 122.64 while AUD/JPY jumped 0.23% to 95.24.


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