- POSTED: 15 Jan 2014 07:19
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The Japanese yen on Tuesday plummeted against the dollar and the euro after the Japanese current account deficit grew much more than expected.
NEW YORK: The Japanese yen on Tuesday plummeted against the dollar and the euro after the Japanese current account deficit grew much more than expected.
Near 2200 GMT, the dollar rose to 104.20 yen from 102.98 yen Monday.
The euro advanced to 142.52 yen from 140.77 yen.
The euro bought $1.3677, up slightly from $1.3670.
Zachary Griffiths, an analyst at Wells Fargo Economics, said Japan's trade data for November confirmed market sentiment in favor of a weaker yen.
"People have had a bearish feeling about the yen for a while and I think that figure kind of exaggerated any bearish outlook," Griffiths said.
The yen has declined steeply against major currencies over the last year in the wake of aggressive stimulus policies launched by Prime Minister Shinzo Abe.
Japanese government data Tuesday said the current account deficit stood at 592.8 billion yen in November, well above analyst estimates and the highest deficit since comparable data became available in 1985.
"When you're looking at a trade deficit that large, that puts pressure on a currency," Griffiths said.
The dollar stabilized against other major currencies after the Commerce Department said December retail sales rose a better-than-expected 0.2 percent.
The retail sales report "alleviated some of the near-term weakness in the greenback" after Friday's disappointing US jobs report, Griffiths said.
Friday's jobs report spurred speculation the US Federal Reserve might curb plans to scale back stimulus.
Among other currencies, the dollar rose to 0.9022 Swiss franc from 0.8991.
The British pound advanced to $1.6438 from $1.6367.