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Japanese Yen Falls Amid Positive Data

The Japanese yen fell against major currencies during the European session on Friday amid risk appetite. The sharp acceleration in economic growth in China and the surge in retail sales in the United States indicate that the global economic recovery is gaining momentum.

Official data showed that China’s GDP grew 18.3% year on year in the first quarter of 2021.

This was not in line with the forecast for a jump of 19.0%. Nonetheless, GDP grew sharply compared to 6.5% growth in the fourth quarter of 2020.

Industrial production rose 14.1% year-on-year in March, falling short of forecasts for 17.2% growth and slowing down from 35.1% growth in February.

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Retail sales soared 34.2% year-on-year this month, beating expectations for a 28.0% rise and rising from 33.8% in the previous month.

The unemployment rate fell to 5.3% from 5.5% in February.

U.S. retail sales are up the most since May 2020, while first jobless claims fell to their lowest level since March 2020, suggesting that the recovery continues.

Market participants are awaiting the release of data on the number of new foundations in the US, building permits and consumer sentiment index.

The yen eased to 108.96 against the greenback and 150.01 against the pound, off its early highs of 108.61 and 3-week highs of 149.39, respectively. The yen may find support at 111.00 against the US dollar and 152.00 against the pound.

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The yen slipped to 130.54 against the euro and 87.06 against the Canadian dollar, bouncing back from its early 3-day highs of 129.98 and 8-day highs of 86.56, respectively. The yen is likely to meet support at 133.00 against the euro and 88.00 against the loonie.

The Japanese currency hit a 3-day low of 118.63 against the franc, climbing to 117.73 at 5:00 pm ET. If the currency continues to fall, it could find support around 119.00.

The yen slipped to 84.37 against the Australian dollar from a previous high of 84.08. The 88.00 level may be viewed as the next support level.

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Meanwhile, the yen climbed back to 77.86 against the New Zealand dollar, climbing from a previous low of 78.03. If the yen continues to rise, 76.00 may be seen as its next resistance level.

At 8:15 am ET, March foundations are due for release in Canada.

Canada’s wholesale sales data for February is due to be released at the New York session.

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