TOKYO: The yen weakened Monday as disappointing Japanese second-quarter GDP data boosted speculation that the country’s central bank will have to unleash more stimulus to counter a downturn.
Growth in the world’s third largest economy was flat at 0.0 percent quarter-on-quarter. That missed economists’ predictions for a 0.2 percent expansion in the April-June period as weak exports and a fall in business spending held back activity.
“This morning’s preliminary GDP prints came in lower than expected,” said Stephen Innes, a senior trader at forex firm OANDA Asia Pacific.
“GDP weakness supports building expectations for the BoJ (Bank of Japan) to add further stimulus.”
In Tokyo late morning trade, the dollar stood at 101.31 yen, up from 101.14 yen in New York on Friday, while the euro bought 113.03 yen, against 112.93 yen. Japan’s central bank holds its next policy meeting next month with the weak GDP data likely to heap more pressure on policymakers for action.
he BoJ disappointed markets at its late July meeting when it opted to leave its 80 trillion yen annual bond-buying programme unchanged, despite signs that second quarter growth would be disappointing.
