Yen weaker on trade deficit

Yen weaker on trade deficit

Story link: Yen weaker on trade deficit

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The Japanese yen weakened Monday after the nation’s Finance Ministry said that it recorded its first trade deficit in 13 years in January.

January’s current-account deficit stood at ¥172.8 billion ($1.76 billion), the largest it has been since records began in January of 1985, as Japan imported more than it exported during the month.

A deficit was expected, but it was only forecast to be at around ¥15.3 billion.

In addition, Japan’s income surplus dropped by 31.5 percent in January from the same month last year as interest rates and dividend payments from overseas declined and as a stronger yen cut the worth of income from foreign investments.

In late morning trade in New York, the yen traded at ¥98.895 to the US dollar and at ¥124.899 to the euro, having taken back some of its declines from earlier, while it stood at ¥136.3129 to the pound.

The pound, meanwhile, saw declines on the announcement that the UK government has taken a majority stake in Lloyds Banking Group (LSE: LLOY), with the bank giving up control in exchange for government guarantees on £260 billion ($367 billion) of its risky assets.

At nearly noon New York time, the pound traded at 91.63p to the euro.

The US dollar strengthened as investors looked to the greenback as a safe investment.