The Japanese yen declined against the other currencies today after opening with a positive weekly gap as the worlds third largest economy contracted for the two consecutive quarters according to the Japans government.
The Gross domestic product (GDP) decreased 0.1 percent in the third quarter of 2008 according to the preliminary report by Japans Economic and Social Research Institute. This contraction followed 0.9 percent decline of GDP in the second quarter of 2008. GDP dropped at 0.4 percent annual rate in the third quarter.
Japan has entered its first recession since 2001, but according to many market analysts it may become the worst one in two decades. The Japanese stock market index Nikkei dropped 44.7 percent this year.
The global financial crisis is hurting the export-orientated and debt-ridden economy as the countrys production giants are slashing profit forecasts for the fourth quarter of this year and the whole 2009. The interest rates set by the Bank of Japan are already lowest among the most developed countries, limiting the ability of the financial authorities to stimulate the economy by the common market regulation instruments.
USD/JPY rose from 96.27 to 96.85 as of 9:44 GMT today after reaching 97.55 during early trading. EUR/JPY went up from 120.65 to 122.77, following 170 pips negative gap on the weeks opening. GBP/JPY rose from 141.15 to 144.61 after posting 190 pips negative gap today.
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