On Thursday morning, the Japanese yen traded at its highest level vs. the U.S. dollar since April 26, 2017. At 5:45 a.m. EDT, during the European trading session, the USD/JPY exchange rate briefly touched 110.239 - the highest rate for the Japanese yen in May.
Japan’s currency has strengthened considerably since the beginning of this week, mainly due to the weakening U.S. dollar, but also as a result of Wednesday’s Preliminary GDP print, which showed the Japanese economy growing at a rate of 0.5 percent in the first quarter of this year.
Analysts estimated that Japan’s Q1 GDP would come in at 0.4 percent!
News of the better-than-expected GDP data out of Japan, in addition to the falling U.S. Dollar Index, which dropped to 6-month lows (97.33) on Wednesday after odds of a Trump impeachment began to rise, gave the yen a considerable boost this week.
The yen saw its biggest surge on Wednesday, when the USD/JPY rate closed the day with a loss of approximately 2 percent - the biggest one-day gain for the yen since July 29, 2016:
While the Japanese yen was trading higher against the dollar in the early-morning hours, the yen's gains were mostly gone by 10:00 a.m., and by 1:30 p.m., the yen started to loose ground against the greenback. The yen closed on Thursday with a loss of 0.59 percent against the USD (111.483).
JPY banknote photo by Katy Ereira
