Japanese Yen Remains Weak after GDP Reading

The latest GDP reading for Japan has been released, and it shows an improvement for the first quarter of 2013. This news hasn’t served to strengthen the yen, however. Instead the Japanese currency is down against its major counterparts on expectations of continued easing.

Japanese GDP increased 0.9 per cent for the first quarter of 2013, beating the forecast of an increase of 0.7 per cent. The gain is being attributed to the rise in exports and to an increase in consumer spending. Many believe that this is a sign that the Japanese economy is ready to move out of stagnation.
However, even though Japan saw an improvement in GDP, it is unlikely that things will change much for the currency. The Bank of Japan is still likely to continue its aggressive easing policy. The economic recovery in Japan is far from over, and as a result the plans to double the money base in the coming years is still in full effect.
Yen remains weak as quantitative easing remains the main source of economic stimulus. And, since other countries aren’t weakening their currencies nearly as much, the yen is likely to retain its weakness for a while.
At 12:34 GMT USD/JPY has moved a little lower to 102.2400 from the open at 102.2535. EUR/JPY is up to 132.0020 from the open at 131.7650. GBP/JPY is up to 156.0275 from the open at 155.7850.

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