Japanese GDP data reflects steady growth, little change in Yen
The Japanese Yen showed a little change today in US Markets after the GDP data of Japan showed its gross domestic product growing more rapidly than was expected by its government initially during the first quarter.
Yet, the Japanese government supported the assumptions that the interest rates will be rising in the next few months.
From late New York trading on Friday last week, the Japanese Yen gained a little from 121.73 to 121.72 against the dollar in Tokyo trading early morning. The Yen stood at 162.56 against the Euro, from 162.80 by the end of previous week.
It is being speculated that an increase in the interest rates can push the traders to trim down on the buying of higher-yielding goods financed by a borrowed Yen, which in other words can also be known as a carry trade.
It has been believed that Japan’s standard interest rate of 0.5 percent, which is known to be the lowest interest rate in the entire trading and business world, was the main reason which led to a low down in the Yen value against mostly all the high yielding currencies in the previous year.
A bond and currency dealer at Okasan Securities Co., Tokyo, Tsutomu Soma stated that there were prospects for an increase in the interest rates around August or September this year.
Although, he also said that this rate increase would not be able to support the Japanese currency much as rates were on the rise in other countries as well, therefore it would not be easy to reduce the Yen’s rate gap. Â
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