Yen is continuing its drop today against its major counterparts, heading lower as the word spreads that a weaker yen is helping Japanese exports. With the economy picking up and exports on the rise, Japanese officials are likely encouraged by the effects that a weakened yen is having.
The latest data released by Japan’s Ministry of Finance shows that exports are on the rise. Japanese exports of electronics and cars indicate a recovery of demand in the United States, Europe, and Asia. Japan’s trade deficit in July was at ¥1.02 trillion, which is the equivalent of about $10.4 billion.
However, the increase in exports doesn’t mean that Japan’s economy is out of the woods yet. There are concerns that higher oil prices will drag on corporate profits, delaying economic recovery. These concerns, along with encouragement that a weak yen is helping the export situation, are likely to prompt the Bank of Japan and other officials to stay the course.
Additionally, there is still the expectation of various measures that Shinzo Abe intends to introduce in an effort to help support corporate profits and the economy.
At 14:36 GMT USD/JPY is up to 98.0310 from the open at 97.6310. EUR/JPY is up to 130.8560 from the open at 130.2050. GBP/JPY is up to 153.4250 from the open at 152.5250.
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