Japanese Yen Outlook Hinges on Broader Market Sentiment, Data Flow

The yen advanced more than 2% against the greenback this week as the dollar came under pressure on concerns over the looming debt limit deadline. The gains come on the back of haven flows accelerated by concerns over sovereign debt downgrades and the threat of defaults in Europe. Economic data out of Japan also supported the yen’s rally with May Tertiary industry index and the June domestic GDP figures topping estimates. Industrial production and capacity utilization followed suit, besting expectations as the economy continues to gather pace in the wake of the March disasters.