ID :
150385
Fri, 11/19/2010 - 14:10
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Shortlink :
https://oananews.org//node/150385
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JAPANESE YEN TO WEAKEN FURTHER VIS-A-VIS US DOLLAR, SAYS MIDF
KUALA LUMPUR, Nov 19 (Bernama) -- The Japanese Yen is expected to weaken further against the US dollar to 90 Yen and 100 Yen next year and in 2012, respectively, from an estimated 80 Yen this year despite a steady appreciation by most Asian currencies against the US dollar.
According to Midf Research although Japan's real gross domestic product (GDP) rebounded this year to register the fastest growth among the G7 economy, the bounce-back was only partial from a relatively deep recession in 2009.
"Our contrasting view on the Yen is due to Japan likely to experience a longer period of weak economic growth coupled with deflation staying much longer than expected, rising fiscal risks and further monetary easing," said the research house in its research note today.
Midf Research said better world trade has largely run its course as the stronger yen would eat into export revenues which were already falling.
Although its third quarter of 2010 real GDP was stronger than expected, up 3.9 per cent year-on-year, it was boosted by the temporary government measures and private consumption.
Nonetheless, the economy could contract again in the fourth quarter of this year and remain sluggish thereafter, hurt by the weak exports and strong yen, thus leaving a sizeable negative output gap.
The research house is expecting the October consumer price index (CPI) for Japan would show both the headline and core inflation to be in positive territory, ending deceleration of prices.
It also said the Bank of Japan looks likely to continue with its easy monetary policy on the high note, underpinned by weaker economic growth, risk of deflation and high public debt.
According to Midf Research although Japan's real gross domestic product (GDP) rebounded this year to register the fastest growth among the G7 economy, the bounce-back was only partial from a relatively deep recession in 2009.
"Our contrasting view on the Yen is due to Japan likely to experience a longer period of weak economic growth coupled with deflation staying much longer than expected, rising fiscal risks and further monetary easing," said the research house in its research note today.
Midf Research said better world trade has largely run its course as the stronger yen would eat into export revenues which were already falling.
Although its third quarter of 2010 real GDP was stronger than expected, up 3.9 per cent year-on-year, it was boosted by the temporary government measures and private consumption.
Nonetheless, the economy could contract again in the fourth quarter of this year and remain sluggish thereafter, hurt by the weak exports and strong yen, thus leaving a sizeable negative output gap.
The research house is expecting the October consumer price index (CPI) for Japan would show both the headline and core inflation to be in positive territory, ending deceleration of prices.
It also said the Bank of Japan looks likely to continue with its easy monetary policy on the high note, underpinned by weaker economic growth, risk of deflation and high public debt.
