Yen hit by weak Japanese GDP data
[TOKYO] The yen weakened Monday as disappointing Japanese second-quarter GDP data boosted speculation that the country's central bank will have to unleash more stimulus to counter a downturn.
Growth in the world's third largest economy was flat at 0.0 per cent quarter-on-quarter. That missed economists' predictions for a 0.2 per cent expansion in the April-June period as weak exports and a fall in business spending held back activity.
"This morning's preliminary GDP prints came in lower than expected," said Stephen Innes, a senior trader at forex firm Oanda Asia Pacific.
"GDP weakness supports building expectations for the BOJ (Bank of Japan) to add further stimulus."
In Tokyo late morning trade, the US dollar stood at 101.31 yen, up from 101.14 yen in New York on Friday, while the euro bought 113.03 yen, against 112.93 yen.
Japan's central bank holds its next policy meeting next month with the weak GDP data likely to heap more pressure on policymakers for action.
The BOJ disappointed markets at its late July meeting when it opted to leave its 80 trillion yen annual bond-buying programme unchanged, despite signs that second quarter growth would be disappointing.
But with a US interest rate hike looking increasingly in doubt for this year, the dollar-yen rate was likely to come under pressure, Mr Innes said.
"With few compelling arguments to support the threat of a Fed hike in 2016, it's difficult to see (the dollar-yen exchange rate) making ground above 102.50 yen resistance levels near term," he added.
In other trading, the euro fetched US$1.1158, edging down from US$1.1166.
Emerging market currencies broadly rose on the US dollar, with the Malaysian ringgit, Taiwan dollar and Thai baht all making gains.
AFP
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