The Japanese Yen rose in the forex markets on Monday, buoyed by strong economic data releases.
The world’s third largest economy according to GDP appears to be emerging from the coronavirus pandemic relatively robustly, largely due to a strong exports demand.
Japanese bank lending increased 6.3% in March from the same time a year before. The increase came as restaurants and hotels took more loans to negate the impact of the ongoing COVID-19 pandemic.
The Bank of Japan data showed that the deposits held by banks also increased in March, up 9.9% as households continued to save rather than spend whilst uncertainty over the pandemic’s remains.
The total amount of outstanding loans held by the country’s four main categories of banks reached a record high at 579.995 trillion yen. In February, total loans increased 6.2%.
Japan wholesale prices rise for the first time in 13 months
Additional data released on Monday showed that Japan’s wholesale prices increased for first time in 13 months in March.
The Bank of Japan (BOJ) data showed that the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, increased 1.0% in March from the same time last year. This was the first increase in 13 months and surpassed market expectations for a 0.5% increase. March’s surprise gain followed a 0.6% decline in February.
Shigeru Shimizu, the head of a BOJ division overseeing price moves said in a briefing:
“The increase is driven mostly by recoveries in the U.S. and Chinese economies, which are pushing up global commodities prices, rather than a rebound in domestic demand”
“It’s too early to say price levels have fully returned to pre-pandemic levels.”
Shigeru Shimizu
JPY Makes Gains
The positive data releases from Japan helped push the Japanese Yen higher in the forex markets. At the time of writing, the USD/JPY is down 0.14%, trading at 109.50.
Meanwhile, the EUR/JPY is down 0.26%, trading at 130.20.
