The US Dollar gaining broad strength helped to send the Japanese Yen to a 10-month trough during London trade on Thursday. News from Japan that the economy is in recession is also keeping the currency under pressure, as is a general improvement in global risk appetite. Earlier in the week, the Japanese Cabinet Office reported that preliminary 4th quarter GDP fell unexpectedly to -1.6% (on a quarter-over-quarter basis), far below the -0.9% that analysts had predicted; the previous reading was at 0.4%. Industrial production also slipped more than anticipated with December's figures at -3.1% on a year-over-year basis against an expected flat reading of -3%. Japanese inflation data is due out later today and analysts are calling for a decline to 0.7% from 0.8% (year-over-year).
As of 11:04 am in London trading, the USD/JPY was at 112.1010 Yen, a gain of 0.75%; the pair has ranged from a session high of 112.193 Yen to a low of 111.107 Yen. The EUR/JPY was trading at 121.005 Yen, up 0.6103% and off the earlier peak of 121.106 Yen. The GBP/JPY was higher at 144.35 Yen, a gain of 0.416%, moving away from the session high at 144.624 Yen.
Despite Data, Pound Loses Steam
An improvement in the latest retail sales figures out of the UK failed to provide any more than a temporary lift for the Pound Sterling. The Office of National Statistics earlier reported that January's retail sales figures came in at 0.8% on an annualized basis, and 0.9% on a monthly basis, above the expected 0.7% for both. Retail sales which excluded fuel purchases was also higher on an annualized and monthly basis, at 1.2% and 1.6%, respectively, with 0.4% and 0.8% predicted. There was a knee-jerk reaction to the news which sent the GBP/USD pair to the daily high but it was unable to sustain momentum and has since slid to $1.2878, a loss of 0.3212%.