Yen Falls on Weak Economic Data
Japan's All Industries Activity Index fell by more than expected in March. According to government data, the index fell 6.3% to 90.7, when most analysts expected it to fall by 6.1%. In the previous month, the index grew by 0.7% to 96.8. The All Industries Activity Index measures the monthly change in overall production by all sectors of the Japanese economy and its value closely follows Japanese GDP and overall growth figures. Weak economic activity took its toll on the Japanese currency, as it lost value against both the U.S. dollar and the euro on Friday. At the moment, the yen is trading at 81.80 against the U.S. dollar (down 0.208%) and at 116.99 against the euro (down 0.204%).
Traders who believe Japan's economic recovery will continue to be fragile might consider shorting the yen. As a result, these traders will keep an eye on the ProShares UltraShort Yen ETF (NYSE: YCS) or the Short Japanese Yen Long US Dollar ETC ETF (SJPY). Some traders believe the Japanese economy will rebound after the government reconstruction plan, following a devastating earthquake and tsunami, kicks in. These traders will be interested in the ProShares Ultra Yen ETF (NYSE: YCL) and the Long Japanese Yen Short US Dollar ETC ETF (LJPY).
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