New York - The yen Monday dipped against the euro and the dollar following a big increase in the Japanese trade deficit, while the dollar advanced on the euro.
In Tokyo, the government said Japan's trade deficit hit $14 billion (1.45 trillion yen) in March, compared with just 356.9 billion yen a year ago.
The huge deficit came as a weaker yen increased the cost of imports, especially of fossil fuels, and was compounded by the fact consumers rushed to buy ahead of the April 1 sales tax hike.
“The weak trade figures suggested that sooner or later, Tokyo may have to resort to bolder monetary policies to keep the economy on the right track,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.
However, Manimbo said the ongoing crisis over Ukraine could keep the yen from falling too far.
“Geopolitical instability in Ukraine tends to be a boon for safer plays such as the yen,” he said.
Many currency pairs did not experience significant moves Monday, in part because trading desks in many European cities were closed for Easter holidays. - Sapa-AFP