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Forex - Yen weakens as GDP data points to slowing annualized growth

Published 11/13/2013, 10:21 PM
Updated 11/13/2013, 10:38 PM
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Investing.com - The yen weakened against the dollar as third quarter preliminary GDP data showed Japan's growth rate halved compared with the first six months of the year on falling demand from emerging markets, signaling aggressive monetary easing would continue or gain pace.

GDP rose 0.5% in the third quarter, beating a forecast of +0.4%, but on an annualized basis, the pace of 1.9% was a sharp slowdown from the 4.3% expansion in the January-March quarter and the 3.8% rise in April-June period.

USD/JPY traded at 99.68, up 0.44%, and a range of 99.14 - 99.73 in whipsaw action as earlier in the session the nominee to replace Ben Bernanke as Federal Reserve chairman sent the dollar down as investors read current Fed Vice Chairman Janet Yellen's prepared remarks for her confirmation hearing as dovish on the timing of a tapering for the central bank's USD85 billion a month bond buying program.

In a statement released late Wednesday, Yellen said the job market and economy are "performing far short of their potential" and there is "more work to do" on recovery.

Expectations for an imminent decision to scale back stimulus measures grew last week U.S. employment and economic growth rates beat expectations.

Yellen said the economy has made good progress, but she thinks unemployment remains "too high."

Yellen was nominated by President Barack Obama to replace Bernanke. She will testify before Congress on Thursday for her confirmation hearing.

In separate remarks to teachers on Wednesday in the U.S., Bernanke said the economy has shown improvement, but unemployment was still coming down slowly.

AUD/USD traded at 0.9346, down 0.13%, after the Melbourne Institute inflation expectation survey for November showed inflation up 1.9%, below the Reserve Bank of Australia's target band of 2% to 3%.

"Consumer inflationary expectations remain moderate across Australia. This is largely a reflection of current moderate economic activity in Australia and provides support for the RBA's decision to keep the official interest rate unchanged at 2.5% - a historic low," said Melbourne Institute research fellow Viet Nguyen.

EUR/USD changed hands at 1.3465, down 0.15%, in afternoon Asian trade.

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