The yen is liable to remain trapped between increased domestic fears and a major lack of confidence in the international economy. Substantial yen losses are unlikely.

The dollar consolidated near 95.40 on Thursday with a rise in European bourses having a small negative impact on the yen. There was subdued trading with the US market closure dampening activity.

The Japanese industrial data remained weak with a 3.1% decline in output for October and fears over the industrial sector are liable to intensify given the downturn in exports. There was also a decline in household spending while the consumer inflation rate slowed sharply. The unemployment rate fell to 3.7% from 4.0% the previous month, contrary to expectations of a rise, although this appeared to reflect discouraged workers leaving the workforce rather than firm demand for labour.

The Nikkei index moved higher on hopes for further action by China to support the regional economy and the dollar was able to find support close to the 95 level. Fears over the global economy will still provide some degree of yen support.