The Japanese yen opened sharply higher against its most-traded rivals today but immediately started to move lower and continued its decline after the release of a poor report on the Japanese trade balance.
Japan’s Ministry of Finance reported that the trade balance logged a deficit of Â¥0.19 trillion in March after logging a surplus of Â¥0.48 trillion in February. Economists were expecting a smaller deficit of Â¥0.11 trillion. Exports dropped by 4.1% — the steepest decline since July 2016. Exports, on the other hand, climbed by 7.2%.
Meanwhile, Japanese Prime Minister Shinzo Abe announced that the government will boost the size of the stimulus package. Now, the government plans to provide ¥100,000 to every citizen instead of giving ¥300,000 to households whose financial situation was hit most by the coronavirus outbreak. That will increase the total amount of the package to ¥117.1 trillion from ¥108.2 trillion approved just two weeks ago.
While the yen fell, it looks like the currency is attempting to reduce its losses. The market mood remained cautious, encouraging investors to stick to safer assets. As a result, the yen may still recover, though it mostly depends on the news about the coronavirus pandemic and how markets react to it.
USD/JPY rose from 107.40 to 107.74 as of 8:45 GMT today. EUR/JPY climbed from 116.68 to 117.11. CHF/JPY surged from 110.77 to 111.35.
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