Japanese Yen Rises Despite Weak Growth Data

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The yen held stronger on Tuesday in Asia despite disappointing third quarter growth figures in a busy regional data day.

USD/JPY changed hands at 123.25, down 0.11%, while AUD/USD traded at 0.7258, down 0.13%.

In Japan, bank lending rose 2.3% as expected year-on-year in November, while the current account for October came in at a surplus of ¥1.458 trillion, slightly narrower than the expected ¥1.659 trillion surplus.

Also in Japan, third quarter GDP slumped 0.8% year-on-year compared to a 0.2% fall seen and fell 0.2% quarter-on-quarter compared to a 0.1% drop expected.

In Australia, the NAB business confidence and business surveys for November are due. In China, key trade data for November is expected at a surplus of $63.30 billion.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.02% at 98.72.

Overnight, the dollar remained broadly higher against the other major currencies in quiet trade on Monday, as Friday’s strong U.S. jobs data continued to fuel expectations for a December rate hike by the Federal Reserve, supporting demand for the greenback.

The dollar strengthened broadly after the Labor Department reported on Friday that the U.S. economy added 211,000 jobs last month, after increasing an upwardly revised 298,000 in October.

The unemployment rate held steady at 5% in November. Economists had forecast jobs growth of 200,000 and no change in the unemployment rate.

The report hardened expectations that the Fed will hike interest rates for the first time since 2006 at its upcoming meeting on December 15-16. Higher U.S. interest rates would make the dollar more attractive to yield-seeking investors.

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