Yen Weakens After China Trade Data, Asia Stocks Gain

The yen weakened against the dollar and other rivals in Asia trade Wednesday, with better-than-expected China trade data and the Asian stock markets’ stability prompting selling of the Japanese currency, considered a safe haven.

Around 0450 GMT, the dollar was changing hands at 118.27 yen, higher than 117.76 yen late Tuesday in New York.

Amid improvement in the market mood, the benchmark Nikkei Stock Average was up 2.7% after each of six sessions since the beginning of the year recorded a loss. The Shanghai Composite Index was lasted traded 0.01% lower.

“China worries calmed down, pushing up the dollar higher,” said Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow.

China’s exports measured in dollar terms fell for the sixth-straight month in December compared with a year earlier, underscoring the headwinds faced by the world’s second-largest economy.

But a 1.4% decline in December exports, following a 6.8% drop in November, was better than a median forecast for an 8.0% decrease by 15 economists surveyed by The Wall Street Journal. Imports in December dropped 7.6% from a year earlier, compared with an 8.7% drop in November, but also beating the poll’s median forecast for an 11.0% decrease.

“Excessive worries have receded,” Mr. Sakai said. “If crude oil prices regain much ground, the dollar may rise a bit more. But such a gain is still uncertain and investors still remain nervous,” Mr. Sakai said.

After touching a new 12-year low below the $30 mark overnight, crude prices picked up in early Asian trade Wednesday.

The Japanese currency was also weaker against the euro, which gained to 128.10 yen from 127.80 yen late Tuesday. The U.K. pound advanced to 171.05 yen from 169.98 yen.

The commodity-linked Australian dollar, sensitive to China growth, hit as high as 83.40 yen late in the morning after China trade data, and recently was changing hands at 83.22 yen. That compared with 82.27 yen late Tuesday.

In other currency-pair trading, the euro declined against the dollar at $1.0829 from $1.0854.

The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.08% at 91.14.

Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT

                           Latest       Previous   %Chg    Daily    Daily   %Chg
Dollar Rates                               Close            High      Low  12/31

USD/JPY Japan           118.27-28      117.64-65  +0.54   118.36   117.65  -1.68
EUR/USD Euro            1.0829-32      1.0858-61  -0.27   1.0863   1.0812  -0.28
GBP/USD U.K.            1.4464-66      1.4446-48  +0.12   1.4477   1.4426  -1.84
USD/CHF Switzerland     1.0045-49      1.0020-24  +0.25   1.0059   1.0020  +0.27
USD/CAD Canada          1.4234-39      1.4260-65  -0.18   1.4277   1.4216  +2.88
AUD/USD Australia       0.7034-38      0.6984-88  +0.72   0.7049   0.6975  -3.44
NZD/USD New Zealand     0.6568-74      0.6536-42  +0.49   0.6590   0.6529  -3.83

Euro Rate

EUR/JPY Japan           128.06-10      127.71-75  +0.27   128.14   127.64  -2.07

Source: Tullett Prebon

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