Dollar Boosted As Japanese Trade Deficit Widens and Other Top Forex News
Frankfurt (Apr 21) The dollar held steady on Monday, remaining in positive territory against most of the major currencies in light trading, with European and Asian markets still closed for the Easter break.
What little news there was today came from Japan, with official data showing that the Japanese trade deficit quadrupled in March as export growth slowed and energy imports continued to rise. A weak Japanese currency, which pushed up the cost of imports, also contributed to the widening gap.
Official data showed that the deficit rose to 1.45 trillion yen ($14bn), up from 356.9bn yen during the same period last year.
Japan’s energy imports have been rising after it shut all its nuclear reactors in the aftermath of the earthquake and tsunami in 2011.
Some analysts also suggest that Japan’s recent sales tax hike also played a part in boosting imports during the month.
Japan’s sales tax – also known as consumption tax – has been increased to 8% from 5% and it will rise again, to 10%, in October 2015.
After this mornings release, the dollar climbed against the yen, with USD/JPY ending the session up 0.17% at 1.0260.
The dollar was further boosted after the Conference Board said in a report, that their U.S. CB Leading Index rose to a seasonally adjusted annual rate of 0.8%, from 0.5% in the preceding month. Analysts had expected U.S. CB Leading Index to rise 0.7% last month.
In other news, the single currency was slightly softer on the back of rising economic sentiment in the U.S. although moves were limited as markets in the eurozone remain closed for the holidays.
EUR/USD ended the session down -0.11% at 1.3795.