The Japanese yen was yesterday’s winner, gaining 0.5% against sterling. However, each time we see the yen improve, the Japanese economy moves in the other direction. Over the last seven months the yen has strengthened, and in this time shipments and imports have all fallen, leaving a trade deficit of $7.5 billion over the last year (the highest since March 2010). There are no major releases out now until Friday, when the year-on-year Consumer Price Index (CPI) data is released, which is expected to show further deflation.
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