The Japanese yen is strengthening against its currency rivals to finish the trading week. The yen has found support on Prime Minister Shinzo Abe stepping down and renewed economic activity in the worldâs third-largest economy. The yen has been performing well in 2020 as investors continue to seek traditional safe-haven assets in the fallout of COVID-19.
On Friday, Japanâs prime minister announced that he would be resigning from his post as head of state due to his deteriorating health condition. Abe, who recently became the longest-serving prime minister in Japanese history, apologized to the country for not completing his term. The 65-year-old, who is known for Abenomics, suffers from an inflammatory bowel disease known as ulcerative colitis. He has lived with this chronic condition since he was a teenager, and it forced him to previously abrupt step down as prime minister in 2007.
I made a judgment I should not continue my job as a prime minister.
I would like to sincerely apologize to the people of Japan for leaving my post with one year left in my term of office, and amid the coronavirus woes, while various policies are still in the process of being implemented.
Abe, described as a conservative and a nationalist, will officially resign when a successor is chosen. His announcement will immediately lead to a vote in his Liberal Democratic Party (LDP) to replace Abe as a leader and decide next week how to hold an election.
The yen gained momentum on better-than-expected economic data. The governmentâs All Industry Activity index advanced by 6.1% in June, followed by a 4.1% contraction in May. The index was driven by a rebound in industrial output and the tertiary industry, but a slumping construction output offset the expansion.
The consumer price index (CPI) fell 0.3% in August, worse than the median estimate of a 0.3% increase. The Leading Economic Index fell short of expectations with a reading of 84.4 in June, while the Coincident Index better market forecasts with a June reading of 76.6.
Stock investment by foreigners slipped in the week ending August 22, while foreign bond investment surged last month.
The USD/JPY currency pair tumbled 1.07% to 105.42, from an opening of 106.57, at 18:14 GMT on Friday. The EUR/JPY dropped 0.53% to 125.31, from an opening of 125.98.
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