2008.12.2206:13:00UTC+00Yen Extends Downtrend Against Euro And Franc

During early European deals on Monday, the yen extended its Asian session's downtrend against the currencies of Europe and Switzerland as the outlook for the Japanese economy has turned increasingly weaker amid the global economic slowdown.

Today, the Japanese government cut its economic assessment for the third consecutive month on declining exports and industrial production. The Cabinet Office said in its Monthly Economic Report for December that the Japanese economy is worsening, taking a gloomier view of the situation compared with the previous report. Such language was last used in February 2002.

At about 4:55 am ET, the yen touched lows of 82.42 against the franc and 126.64 against the euro, compared to Friday's close of 80.91 and 124.16, respectively. If the Japanese currency weakens further, it may likely target 85.5 against the franc and 131.04 against the euro.

A report earlier today showed that Japan posted its second consecutive monthly merchandise trade deficit in November, led by the biggest ever decline in November exports. Japan's Ministry of Finance reported that the nation's trade deficit for November totaled 223.42 billion yen. The figure compared with a deficit of 67.69 billion yen in October and a surplus of 85.68 billion yen in September.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved