Yen climbs on surprise growth
The yen climbed across the board yesterday after gross domestic product data for the fourth quarter of 2006 showed that the economy performed well above expectations.
The dollar fell to a one month low of ¥119.77 before recovering slightly to ¥120.12 while the euro fell to ¥157.74. Both were around 0.5 per cent down over the day.
The October to December figures showed that the economy expanded 3.8 per cent, a full percentage point above market expectations, on healthy consumer spending.
"It was considerably above expectations," Masafumi Yamamoto, currency strategist at Nikki Citigroup, told Reuters. "The market showed a pretty big reaction."
"It will be a positive factor for people who want to raise interest rates, and a rise in rate rise expectations will be a reason to buy yen."
The dollar also fell as Federal Reserve chief Ben Bernanke told a congressional board that inflationary pressures in the US are easing.