Japan current account swings to deficit of 437.3bn yen

The yen lost ground on the dollar today in a reaction to data revealing that Japan’s current account had swung to hit a record deficit in January, reported Reuters.

Meanwhile, the Australian dollar dropped on a weak jobs report which kept alive rate cut expectations. Short-term players sold the yen after Tokyo posted a current account deficit for the first time in three years. It finished at 437.3bn yen ($5.41bn) in January, higher than market forecasts of 317.8bn yen.

The current account was impacted because a shift from nuclear pushed up imports of fossil fuels and it was especially badly hit in January as the Chinese Lunar New Year hit exports. Economists view at as a one-off number and predict that the annual current account will remain in surplus over the next few years.

The dollar strengthened by 0.2 per cent on the yen to 81.20 as traders claimed the two currencies’ bob above resistance on the hourly charts added to upward trend. The dollar gained almost 6.5 per cent on the Japanese currency since the end of January, before finding itself in the band of 81.87-80.50, created by this year’s high as well as the 23.6 per cent retracement of its rise in February,