The Japanese yen is strengthening against its American counterpart on Thursday, despite concerns that the recent typhoon and earthquake that tore through Japan could impact the national economy. The latest weather events are leaving investors fearful of the long-term consequences, especially at a time when the government is trying to stimulate the sluggish economy.
Typhoon Jebi struck western Japan earlier this week, leaving 11 people dead and 100s wounded. The nationâs third-largest airport, Kensai International, was so badly damaged that it could be shut down for a week, prompting analysts to warn that it could affect not only the Osaka region, but the entire nation.
Local media outlets published commentary from economists that listed concerns about businesses in the area, ranging from retail to dining.
In the northern island of Hokkaido, a major agricultural spot and popular tourist destination, a strong earthquake measuring at magnitude-6.7 occurred. This part of the country represents approximately 3.5% of the nationâs economy. It is unclear as to how much damage the temblor caused, but it will likely produce a substantial dent in Japanâs overall economic outlook.
On Monday, Tokyo will release revised gross domestic product (GDP) data for the second quarter. Experts are forecasting an annualized growth of 2.6%, which means the economic effects from the natural disasters will not be showcased until the third quarter.
From extreme temperatures to extreme flooding, the country has been paralyzed, derailing transportation connections and shutting down factories.
The yen has rallied over the last week on rising inflation consumer inflation, accelerating 0.9% in August, up from 0.8% in July. However, the July unemployment rate rose to 2.5% and industrial production dipped 0.1% in July.
The USD/JPY currency pair tumbled 0.53% to 110.93, from an opening of 111.53, at 19:34 GMT on Thursday. The EUR/JPY fell 0.59% to 128.94, from an opening of 129.71.
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