Strong economic data in Japan led the Yen to gain over a percent against the US dollar, in the expectation that the central bank may change its stance on its soft monetary policy in the coming months.
The corporate goods price index firmed up by 2.7% in January, its fastest increase in 16 years. Core sector machinery orders rose a sharp 6.8% against the expectation of a 1.5% increase.
The market was abuzz with activity with hedge funds taking a short position on the dollar and going long on the Yen.
Japan’s economy is still the second largest in the world behind the US and ahead of China and India. However, it has been experiencing flat growth for a long time and is likely to loose its position in the next few years, first to China and then to India.
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