Yen Falls Despite Upward Revision in Japan's Q1 GDP Growth

The Japanese yen fell against the euro and the U.S. dollar on Thursday in spite of an upward revision in Japan's March quarter GDP growth. The

showed that the Japanese economy contracted in the first quarter by 3.3% on an annual basis. The first estimates pointed to a sharper fall of 3.5%. Analysts were expecting the upward revision to be even higher, however. The new data does not change the fact that Japan is still in recession and the smaller upgrade in the Japanese Q1 GDP growth rate falls well into

of a negative growth for the Japanese economy this year. The IMF predicts the Japanese economy will contract by 0.7% this year, down from the previous estimate of a 1.4% growth. The IMF named the devastating earthquake and tsunami as the reason for its downward revision. The IMF also pointed to the quick rebound in 2012, however, as all supply disruptions are resolved and the government reconstruction program takes full effect. The yen lost ground in today's trading against the U.S. dollar and the euro. The greenback added 0.085% to its value and is trading around ¥79.94. At the same time, the euro made even bigger gains, rising 0.314% to ¥116.83. The yen failed to find strength in stronger machine tool orders. According to the

, the machine tool orders rose annually by 34.2% to ¥108.16 billion in May, up from 32.3% recorded in April. The data represents the 18th consecutive monthly increase. The May data was driven primarily by stronger overseas demand, which expanded by 45.6% to ¥75.64 billion. May represents the 19th consecutive month of growth in overseas demand. Domestic demand grew as well, but at a slower pace. Domestic demand increased by 13.4% to ¥32.51 billion, marking the 18th consecutive month of rising machine tool orders. The Japanese economy depends a lot on the performance of its exporters, above all in the manufacturing sector. Constant improvement in machine tool orders should, therefore, provide some relief to investors about the health of the Japanese economy. Traders who believe the IMF prediction will be right and that it will take some time for the Japanese economy to fully recover from the earthquake/tsunami disaster, which should keep the value of the yen subdued for some time, will be interested in the ProShares UltraShort Yen ETF

and the ETFS Short Japanese Yen Long US Dollar ETC (Sterling) ETF (SJPP). Some traders will be encouraged by continuing improvements in Japan's manufacturing sector and will believe the recovery of the Japanese economy will come sooner than the IMF predicts, which should boost the value of the Japanese currency. These traders will be more interested in the JPY/USD Exchange Rate ETN

, the ProShares Ultra Yen ETF

and the WisdomTree Dreyfus Japanese Yen Fund

.