Dollar falls against yen as trade deficit hits record

<p>The dollar has depreciated against the yen as Japan’s trade deficit hits a fresh record.</p>

The dollar has lost ground in trading with the Japanese yen today (February 20th), as the world's third-largest economy reports a new record trade deficit.

Official reports show that Japan's exports increased by 6.4 per cent in January – the first jump in eight months – as goods became better value for money for overseas markets.

However, a depreciating currency also pushed up the nation's import bill, leading to a monthly trade deficit of 1.6 trillion yen (£11.1 billion) – which is a ten per cent rise on a year ago.

Japan has witnessed a rise in fuel imports, as many of the country's nuclear reactors remain closed after the devastation of the tsunami and earthquake nearly two years ago.

As such, imports rose by 7.3 per cent year on year, with liquefied petroleum gas imports surging by over 28 per cent.

At 08:45 GMT, the dollar retreated by 0.2 per cent versus the yen to $1 buying 93.370 yen.

Learn about the yen and forex trading at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.