RTTNews - Thursday in Asia, the yen tumbled against its major counterparts after a report showed that Japan's retail sales fell in April for an eighth-straight month, as household spending continued to flag amid the lingering recession.
The yen slumped to a new multi-month low against the pound, 16-day low against the euro and the franc and a 9-day low against the dollar.
According to data released today by the Ministry of Economy, Trade and Industry, retail sales fell 2.9% year-over-year in April. The result was better than March's overall sales contraction of 3.8% and analysts' expectations for a 3.3% drop.
The main reason for the decline was a fall in housing spending due to rising unemployment, the ministry said.
On a monthly basis, retail sales were up 0.6 percent - topping forecasts for a 0.5 percent increase after the 1.1 percent contraction in March.
Large retailer sales fell a seasonally adjusted 6.7 percent to 1.596 trillion yen - down for the 13th straight month. That was slightly better than forecasts for a 6.8 percent decline after the 8.1 percent fall in the previous month.
The worst postwar recession is spreading to households, whose outlays account for more than half of the economy. Japan may struggle to return to a sustainable growth path as long as companies from Toyota Motor Corp. to Panasonic Corp. keep cutting jobs to minimize losses.
Japan's unemployment rate surged to 4.8 percent in March, the biggest increase since 1967, and analysts expect that a report this week will show it rose to a five-year high of 5 percent in April.
The yen that closed yesterday's trading at 152.11 against the pound slipped to 153.77 during Asian deals on Thursday. This set the lowest point for the yen since November 11, 2008. On the downside, 155 is seen as the next target level for the Japanese currency.
The yen has been weakening against the pound after it reached a record high of 118.88 on January 23. The yen extended its slide in the subsequent months and thus far it has plunged around 23%.
In Asian deals on Thursday, the yen fell to a 9-day low of 96.60 against the dollar. This may be compared to yesterday's close of 95.30. If the Japanese currency moves down further, it may likely target the 97 level.
The dollar-yen pair lost more than 7% after it reached a 5-1/2 -month high of 101.46 on April 06 on the back of a recovery in stock markets, which has pushed the Japanese currency up.
Last week, the dollar remained under heavy selling pressure after Standard & Poor's cut its outlook on Britain's sovereign rating from stable to negative on May 21, sparking worries that a similar move could come for the United States. The dollar-yen pair tumbled to a 2-month low of 93.87 on May 22.
But the dollar recouped its losses this week as a better-than-expected U.S. consumer confidence report reinforced expectations that the worst of the recession is over in the world's largest economy.
U.S. consumer confidence posted its biggest monthly jump in six years and rose to its highest level in eight months, jumping to 54.9 in May from a revised 40.8 in April, the Conference Board said on Tuesday, giving hopes of improvement in the U.S. and the global economy.
Thus far this week, the dollar-yen pair has gained around 2%.
The yen slumped to a 16-day low of 88.35 against the Swiss franc in Asian deals on Thursday. The next downside target level for the yen is seen at 88.6. The franc-yen pair was worth 87.22 at yesterday's close.
The yen has declined 5% against the franc since reaching a 3-week high of 84.09 on May 18.
During Asian deals on Thursday, the yen dropped to a 16-day low of 133.54 against the euro. If the yen falls further, it may likely target the 134.9 level. At yesterday's close, the euro-yen pair was quoted at 131.80.
Traders will have a busy European session today, in which the German ILO unemployment rate, Swiss trade balance, French housing starts and the Euro-zone economic and business confidence reports are expected.
Across the Atlantic, the U.S. durable goods orders and new home sales reports- both for the month of April and the weekly jobless claims report have been slated for release.
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