La vendita allo scoperto per ProShares Ultra Yen dà agli investitori un'idea del grado in cui gli investitori stanno scommettendo sul declino delle azioni di ProShares Ultra Yen. I dati relativi alle vendite allo scoperto vengono aggiornati ogni due settimane.

ProShares Ultra Yen (ARCA:YCL), Report sulle vendite allo scoperto

The fund seeks to meet its investment objective by investing under normal market conditions in any one of, or combinations of, Financial Instruments (including swap agreements, futures contracts and forward contracts) based on the funds benchmark. It will also hold cash or cash equivalents such as U.S. Treasury securities or other high credit quality, short-term fixed-income or similar securities for direct investment or as collateral for Financial Instruments.

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The U.S. dollar fell sharply against the Japanese yen on Thursday as foreign exchange traders interpreted comments by Bank of Japan governor Kazuo Ueda to suggest the central bank will soon end its negative interest rate policy.
The U.S. currency fell 2.6% against the yen (USD/JPY) in early trading on Thursday. The yen also gained strongly versus other rivals, climbing 2.4% against the euro and 2.7% on the U.K. pound.
Exchange traded funds that track both long and short positions on the yen were also big movers. ProShares UltraShort Yen (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YCS#NYSE">YCS</a>) fell 3.7%, while the ProShares Ultra Yen (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YCL#NYSE">YCL</a>), which tracks bullish interest, surged 3.5% early trading on Thursday.
Meanwhile, the Invesco US Dollar Index Bullish Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>) was down 0.2% in early trading, while the Invesco US Dollar Index Bearish Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UDN#NYSE">UDN</a>) gained 0.3%.
<h2 class="wp-block-heading">Policy Tightening Expected From BoJ</h2>
The moves were in response to comments from Governor Ueda on the sustainability of Japan&#8217;s negative rates policy. Ueda said that monetary policy management would &#8220;become even more challenging from the year-end and heading into next year,&#8221; suggesting rates could be raised imminently.
Japan&#8217;s negative rates policy began in January 2016, setting the short-term interest rate at -0.1% and targeting the yield on the 10-year Japanese Government Bond (JGB) at 0%, with a cap at 1%. The BoJ made its first steps into unwinding the policy in November by removing the cap on the JGB, instead suggesting it now become a reference rate.
Also Read: <a href="https://www.benzinga.com/news/23/12/36119267/the-time-to-own-gold-is-now-greg-weldon-sees-breakout-for-bullion">&#8216;The Time To Own Gold Is Now&#8217;: Greg Weldon Sees Breakout For Bullion</a>
Earlier in the week, BoJ Deputy Governor Ryozo Himino said in a speech that Japan&#8217;s aging population of savers would benefit from higher net interest income if rates were to rise.
But the pace of such rises is unlikely to move the needle on yen sentiment a great amount. After four decades of benign inflation, the BoJ is entering new territory and will likely do so very cautiously.
&#8220;We see scope for the market to be disappointed over the pace with which the BoJ is willing to withdraw policy accommodation over the next year or so,&#8221; said Jane Foley, senior FX strategist at Rabobank.
&#8220;That said, we expect the currency pair (USD/JPY) to shift lower in the second half of next year on the back of Fed rate cuts and a very gradual unwind in BoJ policy accommodation.&#8221;
<h2 class="wp-block-heading">Is Dollar/Yen Carry Trade Over?</h2>
As the Fed cuts rates and the BoJ starts to raise, FX markets could see a long-term driver of USD/JPY gains begin to fade as the carry trade becomes more risky.
The carry trade sees currency investors profit from interest rate differentials: forex traders borrow in low yielding currencies such as the yen, to invest in higher-yielders such as the dollar. Such has been the weight of the carry trade, the dollar has gained more than 40% against the yen in the past two years.
&#8220;We doubt USD/JPY will start correcting well in advance before the Fed's first rate cut, given the magnitude of carry,&#8221; said Shusuke Yamad, FX and rates strategist at Bank of America.
The Fed is still expected to make its first rate cut in the first half of 2024, possibly May.
Now Read: <a href="https://www.benzinga.com/news/23/12/36072260/dollar-climbs-have-investors-overdone-the-dovish-fed-trade">Dollar Climbs: Have Investors Overdone The Dovish-Fed Trade?</a>
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Dollar Dives Vs. Yen: BoJ Governor Signals End In Sight For Negative Interest Rates

The Bank of Japan boosted its growth forecast for 2017 and President-elect <a href="http://www.benzinga.com/topic/donald-trump">Donald Trump</a> deserves much of the credit, at least according to Bloomberg's editorial board.
The Bank of Japan <a href="https://www.bloomberg.com/news/articles/2016-12-20/boj-keeps-policy-unchanged-as-weak-yen-brightens-price-outlook">said earlier this week</a> that it now expects its real gross domestic product to rise 1.5 percent in the next fiscal year (beginning April 1) as opposed to a prior forecast of 1.2 percent. Nominal growth is now expected to rise 2.5 percent, up from a prior estimate of 2.2 percent.
<h3>What Did Trump Do?</h3>
Bloomberg noted that the main reason attributed to the Bank of Japan's upwardly revised forecast is the decline in its national currency, the yen. The yen has been falling due to the strengthening of the U.S. dollar, which is gaining due to the prospect of "Trumpian tax cuts," infrastructure spending and other policies Trump is expected to implement.
"The link from speculation over Trump's budgets to the outlook for Japan is a timely reminder of the limits of purely domestic economic policy," Bloomberg noted. "Economies are connected in subtle and sometimes unpredictable ways through global markets for goods and capital. That's why a possible side-effect of expanding domestic demand in the U.S. could be a reduction in exporters' competitiveness from a stronger currency."
Checking in on Japanese Yen ETFs:
<ul>
<li>Proshares Trust II (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) last traded at $54.65.</li>
<li>Guggenheim CurrencyShares Japanese (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>) were up 0.15 percent at $81.94.</li>
<li>Proshares Trust II (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) were down 0.96 percent at $80.67.</li>
</ul>
Image Credit: By Gage Skidmore from Peoria, AZ, United States of America (Donald Trump) [CC BY-SA 2.0], via <a href="https://commons.wikimedia.org/wiki/File:Donald_Trump_(17645083170).jpg">Wikimedia Commons</a>

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Bloomberg: Donald Trump Deserves Credit For Japan's Improving Economic Outlook

With 2012 drawing to a close in a matter of hours, it is fair to say it has been another wild, volatile and perhaps disappointing year for leveraged ETFs. 

Wild and volatile because, and this is no surprise, some of the best-performing ETFs on a percentage basis this year are leveraged funds. 

Disappointing because many leveraged funds continue to confound investors that hold these products for extended time frames. For example, the iShares Dow Jones U.S. Financial Sector Index Fund (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>), not a leveraged ETF, is up 22.6 percent this year. Presumably, that means the ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>), the double-leveraged inverse equivalent of IYF, is down 45.2 percent, right?

Wrong. SKF is off "just" 42 percent, which may be a slight disappointment for those that had fortitude to short that product in January and ride that short all year. To be sure, that strategy should not be employed by all investors. However, use of leveraged ETFs as short-term trades , not long-term investments, will continue to work in 2013. Here are 10 such funds to consider in the new year.

Direxion Daily Gold Miners Bear 3X Shares (NYSE: <a class="ticker" href="/stock/dust#NYSE">DUST</a>)
This list is no particular order, but if it was in order of preference, DUST might just appear in the top spot. The reason being is that gold mining stocks and ETFs <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/11/3135525/even-the-pros-struggle-with-gold-miners-etfs">continue to struggle relative to bullion</a>. Making matters worse is the fact this is becoming a long-running theme.

DUST proves the aforementioned point about the importance of not making leveraged ETFs investments. In 2012, the Market Vectors Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdx#NYSE">GDX</a>) has lost 11.6 percent, but DUST is far worse with a loss of 21.3 percent. Do things the right way and view DUST as a short-term trade and one will see this ETF has surged eight percent in the past month while GDX has tumbled 9.6 percent. 

Bullish alternative: Direxion Daily Gold Miners Bull 3X Shares (NYSE: <a class="ticker" href="/stock/nugt#NYSE">NUGT</a>).

Direxion Daily Financial Bull 3X Shares (NYSE: <a class="ticker" href="/stock/fas#NYSE">FAS</a>)
The infamous FAS has surged 78.2 percent this year. An impressive run to be sure, but investors could have done a lot better by simply buying shares of Bank of America (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>) in January and holding that stake the entire year. Dow component BofA has more than doubled this year. 

Well, that is hindsight and investors are now wondering if FAS can offer a sequel to its 2012 heroics in 2013. It is possible. Financials are slightly cheaper than the broader market as the Financial Services Select SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) has a P/E ratio below that of <a href="https://www.spdrs.com/product/fund.seam?ticker=SPY">the SPDR S&amp;P 500 (NYSE: </a><a class="ticker" href="/stock/spy#NYSE">SPY</a>).

A catalyst(s) for FAS could arrive in the first half of 2013 if regulators allow BofA and Citigroup (NYSE: <a class="ticker" href="/stock/c#NYSE">C</a>) to boost dividends and engage in much needed share repurchase programs.

Bearish alternative: Direxion Daily Financial Bear 3X Shares (NYSE: <a class="ticker" href="/stock/faz#NYSE">FAZ</a>).

ProShares UltraShort Oil &amp; Gas (NYSE: <a class="ticker" href="/stock/dug#NYSE">DUG</a>)
Here is another example of the dangers of holding a leveraged ETF over the course of a year. The index DUG is designed to deliver two times the daily inverse performance of the same index tracked by the iShares Dow Jones U.S. Energy Sector Index Fund (NYSE: <a class="ticker" href="/stock/iye#NYSE">IYE</a>). That ETF is up about 0.7 percent this year, but DUG has lost almost 15 percent. As is the case with DUST, there have been stretches of time where DUG has proven to be one of the better energy ETFs, though it is important to note those stretches do not last 10 or 12 months. 

Amid faltering production, integrated oil names could be in for another mediocre year in 2013, implying DUG is worth keeping an eye on.

Bullish alternative: ProShares Ultra Oil &amp; Gas (NYSE: <a class="ticker" href="/stock/dig#NYSE">DIG</a>).

Direxion Daily Technology 3X Bear Shares (NYSE: TECS)
It is not hyperbole to say tons of market participants are concerned about Apple (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>). The largest U.S. company by market value traded over $700 in October, but appears destined to close the year below $530. 

Apple accounts for 17.2 percent of the Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>), the ETF that tracks the same index TECS is designed to deliver three times the daily inverse performance of. When properly applied, TECS is useful either for those looking to profit from an Apple decline without having to incur the risks of shorting the stock directly, or the limitations of the options market. Additionally, since TECS trades for less than $10, those that are long Apple or XLK, can use TECS as an occasional hedge.

Bullish alternative: Direxion Daily Technology 3X Bull Shares (NYSE: TECL). 

ProShares UltraShort Yen (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>)
Of all the ETFs mentioned on this list, YCS may come with the most simple, obvious reasoning. The yen will close 2012 as the worst-performing developed market currency. Newly elected Japanese Prime Minister Shinzo Abe <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/12/3200690/play-the-japan-rally-with-these-etfs">has pledged to pressure the Bank of Japan</a> to engage in unlimited monetary easing and target two percent inflation.

At this juncture, it appears BoJ will acquiesce to Abe's demands. It is either that or risk losing its independence. 

Bullish alternative: ProShares Ultra Yen (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>).

Direxion Daily Small Cap Bull 3X Shares (NYSE: <a class="ticker" href="/stock/tna#NYSE">TNA</a>)
Small-caps have held up quite well in an environment made challenging by politicians' inability to solve the fiscal cliff. The iShares Russell 2000 Index Fund (NYSE: <a class="ticker" href="/stock/iwm#NYSE">IWM</a>) has gained 1.7 percent in the past month compared to a loss 0.8 percent for the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>). 

That could be a promising sign regarding the chances of a January Effect, the scenario under which small-caps leader a broader market rally to start the new year. If small-caps do become a leadership group in the first quarter, then the Direxion Daily Small Cap Bull 3X Shares becomes useful as a short-term trade.

Bearish alternative: Direxion Daily Small Cap Bear 3X Shares (NYSE: <a class="ticker" href="/stock/tza#NYSE">TZA</a>).

ProShares Ultra FTSE China 25 (NYSE: <a class="ticker" href="/stock/xpp#NYSE">XPP</a>)To its credit, the ProShares Ultra FTSE China 25 has not deviated too far from double the returns of its unleveraged equivalent, that being the iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>). Year-to-date, over the past six months, 90 days and 30 days, XPP has offered just over double the returns of FXI. 

That should not change the fact that leveraged ETFs are not intended to be held all year. However, with Chinese equities and plain vanilla China ETFs closing 2012 in strong fashion, XPP merits consideration for the year ahead. 

Investors should note that XPP sharply outperformed the Direxion Daily China Bull 3X ETF (NYSE: <a class="ticker" href="/stock/yinn#NYSE">YINN</a>) in 2012. The two track different indexes and that likely explains the difference. Both funds are highly risky, but if one can grab better returns with a double-leveraged ETF over a similar triple-leveraged product, that is a deal that should be taken. 

Bearish alternative: ProShares UltraShort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>).

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

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Leveraged ETFs For The New Year: 7 for 2013

The yen is trading at its lowest level against the U.S. dollar in six months after Japanese prime minister Yoshihiko Noda held up his end of a bargain struck with the opposition parties and called an election for December 16. The Diet will be dissolved on Friday and campaigning will begin for the control of the House of Representatives (Lower House). 

Japan had been facing its own fiscal cliff due to the refusal of the major opposition parties, the Liberal Democratic Party (LDP) and the Komeito, to authorize deficit spending for the current fiscal year, which ends on March 31, 2013, unless Noda, head of the ruling Democratic Party of Japan (DPJ) set a date for the election. 

Japanese law requires that the Lower House specifically authorize deficit spending before the government is allowed to issue bonds to finance the deficit. The political stalemate had been jeopardizing the efforts to rebuild after last year's devastating earthquake and tsunami along Japan's northeast coast.

After a series of closed door meetings. Noda and the leaders of the LDP and Komeito announced that they had reached an agreement to authorize the deficit spending, avoiding a government shutdown. Although Noda did not announce the date of the election immediately, he did so within a few days.

Voters have lost faith in the ability of the DPJ to govern following a series of scandals and missteps before, during and after the earthquake. Most observers think that the DPJ will lose the election but there is little voter support for the opposition LDP. 

In fact, the politics is getting really messy as there has been a rush of DPJ Diet members leaving the party, either to join the LDP or one of the two new parties that have been set up to attract DPJ defectors. At this point, it seems likely that the new government will have to be a coalition but it is anyone's guess how that will turn out.

That's the reality of the situation.

The market is selling the yen because, according to <a href="http://www.bloomberg.com/news/2012-11-14/yen-trades-near-week-low-on-election-risk-euro-drops.html">Bloomberg</a>, Shinzo Abe, who was prime minister in 2006 and 2007 and leads the LDP today, “…called for the central bank to provide unlimited stimulus.” 

“The leader of Japan's opposition is coming down quite heavily, saying what he would like the Bank of Japan to do in terms of easing and that's pressuring the yen,” Jane Foley, a senior currency strategist at Rabobank International in London told Bloomberg.

<a href="http://www.reuters.com/article/2012/11/15/us-markets-forex-idUSBRE8A70Q320121115">Reuters</a> commented, ”Shinzo Abe, the head of Japan's Liberal Democratic Party and frontrunner in next month's election, wants the Bank of Japan to consider sub-zero interest rates and reverse the yen's strength.” The Reuters article continued, ““Signs that the LDP will step up efforts to weaken the yen if it comes to power prompted investors to sell the currency against both the dollar and the euro.”

The idea of negative interest rates is really just election rhetoric. Japan has had negative overnight rates several times during the height of the banking crisis about ten years ago and it wasn't pretty. Negative interest rates did not appreciably weaken the yen at that time.

What we can say is that the yen seems to have been somewhat overbought and was due for a correction. Even an LDP victory is unlikely to change Bank of Japan policy very much because, with interest rates already at zero, there isn't much more that a central bank can do.

Traders who want to play the yen's current volatility through ETFs should look at the Ryder CurrencyShares Japanese Yen Trust (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>) or the ProShares Ultra Short Yen (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>), both of which offer adequate liquidity for retail investors. The ProShares Ultra Yen (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) and the Wisdom Tree Dreyfus Japanese Yen Fund (NYSE: <a class="ticker" href="/stock/jyf#NYSE">JYF</a>) a seem to be relatively illiquid at this time.

Yen Weakens on Hopes for Further Easing

The Japanese yen rose on Wednesday on strong tertiary sector activity. Presently, the U.S. dollar is trading around ¥76.87, or 0.14% below its previous close, while the euro retreated 0.31% to stand around ¥110.3. 

On Wednesday, Japan's economy posted some encouraging news. According to <a href="http://www.forexjournal.com/world/asia-pacifics/15151-japan-tertiary-industry-activity-index-19-in-june-.html">Ministry of Economy, Trade and Industry</a>, tertiary sector activity index rose 1.9% in July compared to the previous month. The July figure was on top of 0.8% recorded in June and 1% expected by most analysts. The index includes sectors like retail trade, finance, accommodation, transportation etc.

Japan's economy has been hit hard by the twin natural disaster in March, which has created energy shortages and supply disruptions. Since then, the Japanese economy has been on a slow path to recovery. The latest figures might be a sign that the Japanese recovery is gaining momentum. However, Japan is an export-oriented economy, so the latest threat of a double dip recession in the U.S. and the Eurozone could hurt Japan's growth prospects. 

Asia's largest economy, China, has been posting strong results on Wednesday as well. The latest data show that <a href="http://www.ibtimes.com/articles/195317/20110809/china-trade-balance-rises-nbsp.htm">China's trade surplus</a> rose to $31.5 billion, its highest level in 2 years. The July figure comfortably beat $27.4 billion expected by most analysts and $22.3 billion reported in June. The July figure was driven primarily by rising exports. On a yearly basis, exports rose 20.4% in July, above 17.9% recorded in June and 17% expected by analysts. At the same time, imports increased by 22.9% year-over-year, slightly higher than 22% expected by most analysts and June's value of 19.3%.

China's economic performance has remained impressive throughout the current financial crisis in the developed world. The latest figures will likely reinforce analysts' belief that there is a lot more power left in the Asian Dragon. At the same time, rising trade surplus will provide more ammunition to the Western governments, which have been claiming for a while now that the Chinese authorities are using undervalued currency to give an unfair edge to Chinese exporters. 

China and Japan should be also buoyed by the recent fall in oil prices, since both countries rely heavily on importing raw materials. The price of oil has fallen sharply since the downgrade of the U.S. debt highlighted the possibility of a double dip recession in the world's largest economy. Presently, crude oil stands around $81.50, or 0.26% above its previous close. The price of natural gas fell 0.22% to $4.013, while copper retreated 0.19% to trade around $4.036.

ACTION ITEMS: Bullish: Traders who believe that low commodity prices will provide additional steam to the Japanese recovery might want to consider the following trades: 

<ul><li>CurrencyShares Japanese Yen Trust ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>) is a long play on the yen. FXY may rise if the yen appreciates.</li></ul>

<ul><li>ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) is another long play on the yen. However, YCL should rise more than FXY if the yen appreciates.</li></ul>

<ul><li>PowerShares DB Commodity Short ETN (NYSE: <a class="ticker" href="/stock/ddp#NYSE">DDP</a>) is a short play on commodities. DDP may rise if the prices of commodities fall.</li></ul>

Bearish: Traders who believe that strong growth in China will help push up the prices of commodities, which, along with the slowdown in the United States and the Eurozone, could damage Japan's growth prospects may consider an alternate positions: 

<ul><li>ETFS Short Japanese Yen Long US Dollar ETC (Sterling) ETF (SJPP) is a short play on the yen. SJPP may rise if the yen depreciates.</li></ul>

<ul><li>ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) is another short play on the yen. However, YCS should rise more than SJPP if the yen depreciates.</li></ul>

<ul><li>Dow Jones-AIG Commodity Index Total Return ETN (NYSE: <a class="ticker" href="/stock/djp#NYSE">DJP</a>) is a long play on commodities. DJP may rise if the prices of commodities increase.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

iPath Dow Jones-UBSmmodity Index Total Return ETN

Yen Rises on Strong Tertiary Sector Activity 

The Japanese yen is moving toward pre-intervention levels on Monday as S&amp;P's downgrade of the U.S. sovereign debt highlights the inability of the U.S. and the Eurozone to resolve their debt problems. Presently, the U.S. dollar retreated 0.74% against the yen to stand around ¥77.89. At the same time, the euro surrendered 0.32% of its value to trade around ¥111.73.

Last week, the Bank of Japan intervened in the markets in order to weaken the yen. The yen, along with the Swiss franc and gold, has been acting as a safe haven for investors fleeing the greenback and the euro as the two largest world economies – the United States and the Eurozone – are unable to find a resolution to their debt crises. Japan is an exports-driven economy, and strong yen will hurt the performance of the country's powerful exporting sector. The Japanese authorities had to intervene because without strong performance of exporters, Japan's economic recovery, following the twin natural disasters, will be under threat.

In spite of the Bank of Japan's efforts, the yen rebounded quickly. The reason is that the intervention by Japan's central bank did not change market fundamentals. Following the first ever <a href="http://www.bloomberg.com/news/2011-08-06/u-s-credit-rating-cut-by-s-p-for-first-time-on-deficit-reduction-accord.html">downgrade of the U.S. sovereign debt by S&amp;P</a> to AA+ from AAA, the debt concerns in the world's largest economy are likely to even intensify. At the same time, the rating agency left its outlook set at negative, which means more cuts could be in place if the situation with the U.S. budget deficit does not improve. 

The debt crisis in the U.S. has a potential to further rock the Eurozone. It will be interesting to follow investors' moves. The U.S. Treasury bonds are traditionally considered to be the safest investment. The recent downgrade might spark an exodus of traders from less safe bets, including the Eurozone periphery bonds, which could push Spain and Italy over the edge. In this environment, many traders are seeking shelter in the yen, despite efforts by the Bank of Japan to weaken the yen, and despite the country's fragile economic recovery.

On Monday, the world's third largest economy posted mixed results. According to <a href="http://uk.reuters.com/article/2011/08/08/japan-economy-lending-idUKT9E7J106Y20110808">the Bank of Japan</a>, bank lending fell 0.5% in July year-over-year, slightly down from -0.6% recorded in June. However, the July figure represents the 20th consecutive month of falling loans.

At the same time, Japan's current account surplus suffered a big fall on an annual basis in July. According to <a href="http://www.reuters.com/article/2011/08/08/japan-economy-current-idUST9E7J100D20110808">the Ministry of Finance</a>, Japan's current account surplus fell 50.2% in July, compared to a year earlier. In June, the fall was even steeper as the nation's surplus was 51.7% lower than June 2010. However, most analysts had predicted Japan's current account surplus to fall by only 39%.

Some encouragement to the country's economic recovery was provided by <a href="http://www.rttnews.com/Content/AsianEconomicNews.aspx?ID=1685678&amp;SM=2">the Economy Watchers Current Index</a>. In July, the index rose to 52.6, beating analysts' expectations of 50. The index determines the nation's sentiment about Japan's economic activity. Any reading above 50 suggests optimism, while readings below 50 suggest pessimism. 

The latest data clearly indicate that Japan is recovering from the twin natural disasters that have devastated parts of Japan, creating energy shortages and supply disruptions. However, the speed of Japan's economic recovery will probably not impress many. As a result, if traders continue to seek shelter in the yen, the Bank of Japan may intensify its efforts to stop the yen from rising even higher against the greenback in order to help Japan's exporters and the country's fragile economic recovery.

ACTION ITEMS: Bullish: Traders who believe that traders will continue to seek shelter in the Japanese yen, and that the Bank of Japan will be unable to prevent the yen from rising higher, might want to consider the following trades: 

<ul><li>CurrencyShares Japanese Yen Trust ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>) is a long play on the yen. FXY may rise if the yen appreciates.</li></ul>

<ul><li>ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) is another long play on the yen. However, YCL should rise more than FXY if the yen appreciates.</li></ul>

Bearish: Traders who believe that the Bank of Japan will be able to weaken the yen in order to help the country's exporters may consider an alternate positions: 

<ul><li>ETFS Short Japanese Yen Long US Dollar ETC (Sterling) ETF (SJPP) is a short play on the yen. SJPP may rise if the yen depreciates.</li></ul>

<ul><li>ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) is another short play on the yen. However, YCS should rise more than SJPP if the yen depreciates.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Yen Rises Following S&P's Downgrade 

The Japanese yen started to recover on Friday, following Thursday's sell-off in the wake of the Bank of Japan's intervention, as debt fears in the United States and the Eurozone persist. Presently, the U.S. dollar lost 0.35% of its value against the yen to stand around ¥78.62. At the same time, the euro is trading around ¥111.03, or 0.17% below its previous close. 

On Thursday, the Bank of Japan interfered in the markets in order to bring down the value of the yen. Even though it did have initial success, the yen seems to be on the rise once more. The fact of the matter is that the central bank's intervention did not change the underlying reason behind the rising yen, and that is the continuation of debt problems in the Eurozone and the U.S. As mounting debt puts pressure on the world's largest economic blocks, traders are seeking shelter in the Swiss franc, the yen and gold. On Wednesday, the Swiss central bank took markets by surprise by cutting its interest rates to near zero in order to weaken the franc. On Thursday, the Bank of Japan made its move.

Both Switzerland and Japan are export-led economies, so strong currencies are a threat to their economy, as strong currency makes exporters less competitive in the global markets. Therefore, the latest interventions by the two major central banks can be seen as an attempt to help domestic producers. The move is especially important for Japan, since its economy is still in the process of recovery from the devastating twin natural disasters.

Just how fragile the economic recovery in Japan is can be illustrated by Friday's Leading Indicators Index data. In June, Japan's <a href="http://www.dailyfx.com/forex/market_alert/2011/08/05/Japans_Leading_Index_Modestly_Misses_But_Shows_Signs_of_Strength.html">Leading Indicators Index</a> improved from May, but fell below analysts' expectation. The June reading was 103.2, compared to 99.4 recorded in May, and 103.4 expected by most analysts. The index is formed by combining 12 indicators ranging from machinery orders to stock prices, and is a good approximation of the health of the overall economy. 

Like Japan, Australia is trying to recover from natural disasters, namely the Queensland floods. Like in Japan, the recovery is not necessary going according to the government's plans. On Friday, <a href="http://www.bbc.co.uk/news/business-14415113">the Reserve Bank of Australia</a>, the nation's central bank, has lowered its growth projections. According to its latest estimates, Australia's economy should grow 3.25% this year, down from its previous estimate of 4.25%. The central bank stated that the economy will suffer due to weak domestic demand.

A good indication of how slow the Australian recovery is can be found in the construction data. In July, Australia's <a href="http://www.fxstreet.com/news/forex-news/article.aspx?storyid=842980d0-c91e-4d5e-b6e0-0674bc3603cc">AIG Construction Index</a> rose to 36.10, from 35.8 in June. The index represents an amount spent by builders on both private and public projects. Even though the July figure is an improvement, the sector is still contracting, since any reading below 50 indicates contraction. 

ACTION ITEMS: Bullish: Traders who believe that the economies of Japan and Australia will continue to recover from the negative effects of natural disasters might want to consider the following trades: 

<ul><li>CurrencyShares Japanese Yen Trust ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>) is a long play on the yen. FXY may rise if the yen appreciates.</li></ul>

<ul><li>ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) is another long play on the yen. However, YCL should rise more than FXY if the yen appreciates.</li></ul>

<ul><li>CurrencyShares Australian Dollar Trust ETF (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>) is a long play on the franc. FXA may rise if the franc appreciates.</li></ul>

Bearish: Traders who believe that there are a lot of obstacles for Japan and Australia on their way to full recovery, and one of them is an overvalued currency, may consider an alternate positions: 

<ul><li>ETFS Short Japanese Yen Long US Dollar ETC (Sterling) ETF (SJPP) is a short play on the yen. SJPP may rise if the yen depreciates.</li></ul>

<ul><li>ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) is another short play on the yen. However, YCS should rise more than SJPP if the yen depreciates.</li></ul>

<ul><li>ETFS Short Australian Dollar Long US Dollar ETC ETF (<a class="ticker" href="/stock/sad#">SAD</a>) is a short play on the franc. SAD may rise if the franc depreciates.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

AB Svensk Ekportkredit (Swedish Export Credit Corporation)

Yen Starts to Recover as Debt Fears in the U.S. and Eurozone Persist

The Japanese yen plunged in Thursday's trading as the Bank of Japan intervenes to weaken the yen. Presently, the U.S. dollar added 3.04% to its value against the yen to trade around ¥79.38, while the euro stands around ¥113.31, or 2.7% above its previous close.

On Thursday, the Bank of Japan sent the yen tumbling after announcing measures to contain its rise. The yen rose around 5% in the last month alone, too much for the Japanese authorities to stand by idly, it seems. <a href="http://www.reuters.com/article/2011/08/04/us-japan-economy-yen-idUSTRE77308U20110804">Japan's central bank</a> left its interest rates, which are currently between 0% and 0.1%, on hold. More importantly, the central bank announced it will increase the size of its asset buying fund to ¥15 trillion from ¥10 trillion.

The yen has been rising as a result of the debt crises in the Eurozone and the United States. Japan's authorities were not too pleased about it as strong yen makes Japan's exports less competitive in the global markets. Many analysts place their hopes on Japan's powerful exporting sector to push Japan out of doldrums created by the twin disasters. 

This is the second time this year that the Japanese authorities have intervened in the currency markets. Following the devastating natural disasters that have struck Japan in March, <a href="http://www.omaha.com/article/20110804/AP05/308049989">the G7 countries</a> made an orchestrated intervention to weaken the yen, the first time the group made such an effort since the year 2000, when the group came to the euro's rescue. This time, however, Japan acted on its own.

The Bank of Japan's move comes after similar effort by the Swiss central bank. In the past 52 weeks, the franc increased its value against the greenback by 36% and by 26% against the euro. It seemed only the sky is the limit for the franc, so the Swiss National Bank had to step in. <a href="http://www.reuters.com/article/2011/08/03/us-swiss-snb-idUSTRE7721MS20110803">The Swiss central bank</a> surprised the markets on Wednesday by cutting its interest rates from 0.25% to as close to zero as possible. At the same time, the central bank pledged to increase monetary supply in order to further weaken the franc. At around 6:24 am GMT, the greenback added 1.02% to its value against the franc to stand around 0.7782. At the same time, the European currency recovered some of its losses against the Swiss currency, trading around 1.1114, or 0.71% above its previous close. 

Like Japan, Switzerland is an exports-led economy. Even though the performance of the Swiss economy has been stellar in recent years, at least compared to other developed nations, strong franc threatens to hurt the Swiss producers as it makes exports more expensive and imports cheaper. However, it is not clear how much the Swiss National Bank can do to contain the rise of the franc. The strength of the franc has little to do with the country's interest rates. Instead, the franc is skyrocketing because traders view the Swiss currency as a safe-haven in turbulent times. As both the United States and the Eurozone are pressed by debt problems, which threaten the world economy's recovery, traders are increasingly fleeing to the safety of the franc, and gold for that matter. The actions by the Swiss central bank have pushed the yellow metal to new heights. Presently, gold trades around $1,663.45, or 0.08% below its previous close, while silver retreated 0.26% to stand around $41.67.

ACTION ITEMS: Bullish: Traders who believe that the actions of the Japanese and Swiss central bank will be in vain, and that the yen and the franc will keep rising due to debt problems in the Eurozone and the United States, might want to consider the following trades: 

<ul><li>CurrencyShares Japanese Yen Trust ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>) is a long play on the yen. FXY may rise if the yen appreciates.</li></ul>

<ul><li>ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) is another long play on the yen. However, YCL should rise more than FXY if the yen appreciates.</li></ul>

<ul><li>CurrencyShares Swiss Franc Trust ETF (NYSE: <a class="ticker" href="/stock/fxf#NYSE">FXF</a>) is a long play on the franc. FXF may rise if the franc appreciates.</li></ul>

Bearish: Traders who believe that the central banks will be able to push the values of the franc and the yen down may consider an alternate positions: 

<ul><li>ETFS Short Japanese Yen Long US Dollar ETC (Sterling) ETF (SJPP) is a short play on the yen. SJPP may rise if the yen depreciates.</li></ul>

<ul><li>ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) is another short play on the yen. However, YCS should rise more than SJPP if the yen depreciates.</li></ul>

<ul><li>ETFS Short Swiss Franc Long US Dollar ETC ETF (<a class="ticker" href="/stock/schf#">SCHF</a>) is a short play on the franc. SCHF may rise if the franc depreciates.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

SCHF

Yen Plunges as Central Bank Intervenes

The Japanese yen rose against major currencies on Friday as reports suggested Japan's inflation and unemployment are on the rise. At the moment, the U.S. dollar trades around ¥77.55, or 0.21% below its previous close. At the same time, the yen is approaching the ¥110 mark against the euro as the European currency surrendered 0.49% of its value to trade around ¥110.81.

On Friday, Japan's economy posted mixed results. For once, <a href="http://www.japantoday.com/category/business/view/japans-unemployment-rate-rises-to-4-6-in-june">the country's unemployment rate</a> surprisingly edged higher to 4.6% in June, when most analysts expected it to remain unchanged from 4.5% recorded in May. The figures excluded the areas directly affected by the earthquake and tsunami disaster back in March.

Rising unemployment came hand in hand with rising inflation. In June, <a href="http://jen.jiji.com/jc/eng?g=eco&amp;k=2011072900185">Japan's core CPI</a> rose 0.4% on a yearly basis, slightly below analysts' expectations of a 0.5% rise. CPI for the Tokyo area, for which data is available one month in advance, was 0.4% higher in July than a year ago. Rising inflation is normally a bad sign for the overall health of the economy as it puts pressure on the monetary authorities to tighten their belts. However, Japan has been struggling to fight off deflationary pressures for more than a decade, so rising inflation might be interpreted as a sign that Japan may be about to shake off deflationary pressures for good.

Japan's factory output also managed to underperform. According to <a href="http://www.businessweek.com/news/2011-07-28/japan-s-industrial-output-rose-less-than-expected-in-june.html">the Trade Ministry</a>, factory output rose 3.9% in June from 6.2% in May, when most analysts predicted a 4.5% increase. The June figure was hit by strong yen, which is threatening to undermine the performance of the country's big exporters like Nissan Motor Company and Toyota Motor Corporation.

One area where the Japanese economy managed to beat market expectations was housing starts. According to <a href="http://classic.cnbc.com/id/43939079">the Ministry of Land</a>, housing starts rose 5.8% year-over-year in June, a third straight month of increases. In May, housing starts were 6.4% above their value a year ago, but analysts were expecting the June figure to be an even steeper fall to 5%.

Overall, the data published on Friday show that Japan is recovering from the double natural disaster that has struck the island nation a few month ago. However, the latest data equally point out to the fragility of Japan's recovery, especially in the jobs market. Traders seemed to focus on the positive side of the story as the yen strengthened against its main rivals. However, strong yen seems to be one of the reasons why Japan's economy is not able to rebound more strongly. Japan is an exports-driven economy and strong yen is making its exporters less competitive in the global markets. 

ACTION ITEMS: Bullish: Traders who believe that Japan is slowly but surely on its path to full recovery following devastating natural disasters, which should provide some tailwind for the yen, might want to consider the following trades: 

<ul><li>CurrencyShares Japanese Yen Trust ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>) is a long play on the yen. FXY may rise if the yen appreciates.</li></ul>

<ul><li>ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) is another long play on the yen. However, YCL should rise more than FXY if the yen appreciates.</li></ul>

Bearish: Traders who believe that the yen is already riding too high and is damaging the country's mighty exports sector, thus threatening Japan's economic recovery, may consider an alternate positions: 

<ul><li>ETFS Short Japanese Yen Long US Dollar ETC (Sterling) ETF (SJPP) is a short play on the yen. SJPP may rise if the yen depreciates.</li></ul>

<ul><li>ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) is another short play on the yen. However, YCS should rise more than SJPP if the yen depreciates.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Japanese Yen Rises Despite Higher Unemployment and Inflation

The Japanese yen weakened against the U.S. dollar and the euro on Thursday, despite improvements in the Japanese economic performance. At the moment, the greenback added 0.02% to its value against the yen to trade around ¥78.79. At the same time, the euro climbed 0.35% higher to stand around ¥112.38.

The yen failed to find support in better than expected economic results. In May, <a href="http://www.fxstreet.com/news/forex-news/article.aspx?storyid=284a6679-4d24-4162-bf1b-a0e3aac6b427">Japan's All Industry Activity Index</a> rose 2% to beat analysts' expectations of a 1.7% rise. In April, the index posted a 1.4% increase. The index follows changes in production among different sectors of the Japanese economy and serves as a good proxy for the GDP movements.

The latest results could be interpreted as a clear sign that the Japanese economy has turned the corner following the worst natural disaster in its recent history. The devastating earthquake/tsunami and the Fukushima disaster have caused energy shortages and supply disruptions, creating problems across sectors all over Japan. It seems Japan is slowly leaving the natural disaster troubles behind.

June's trade balance provided even more powerful evidence that Japan's economic reality is getting back to normal. According to <a href="http://www.bbc.co.uk/news/business-14229316">Japan's finance ministry</a>, trade balance was back in black after three months in June as Japan posted a ¥70.7 billion surplus. Exports recovered strongly in June, rising 5.4% compared to a month earlier. However, on a yearly basis, exports fell 1.6%, still an improvement from a 4.1% fall in May. 

For decades, Japan's economy has been exports-driven. Few months of trade balance deficits were a direct consequence of energy shortages and supply disruptions caused by the natural disasters. It seems the worst is over for Japan's massive exports sector. 

The picture is not all rosy for the Japanese exporters, however, as debt problems in the Eurozone and the United States threaten to bring back the global economy back into recession, causing a massive dip in demand for Japan's products. The Eurozone leaders are meeting today to discuss the debt crisis in the Eurozone periphery. It is becoming painfully obvious that the way the European leaders have been handling the crisis is not producing expected results. Therefore, a dramatic shift in the approach to the crisis is needed. Unfortunately, there is little evidence that the Europeans can agree on a radical change in the way they are handling the crisis.

In the United States, the two parties are still unable to frame a common position on how to eliminate the country's massive budget deficit. The Democrats are prepared to accept some deep cuts in the country's social spending, in return for raising taxes for the rich. However, the Republicans, who control the House of Representatives, do not want to hear a word of raising taxes, claiming it will only hurt job creation. If the debt ceiling is not raised soon, the U.S. government will be forced to shut down by August 2. However, President Obama wants to reach an agreement earlier to give time to the lawmakers to vote in the new deal.

Time is running out for both the U.S. and the Eurozone. In the meantime, traders seem to be looking for shelter in precious metals. At the moment, gold is trading above the $1,600 mark once more, rising 0.22% to $1,603.85. Silver has passed an important $40 barrier as well, climbing 0.62% to stand around $40.27.

ACTION ITEMS: Bullish: Traders who believe that the latest economic results indicate that the Japanese economy has successfully recovered from the earthquake/tsunami aftermath, providing a lot of tailwind for the yen, might want to consider the following trades: 

<ul><li>JPY/USD Exchange Rate ETN (NYSE: <a class="ticker" href="/stock/jyn#NYSE">JYN</a>) is a long position on the yen. JYN should rise if the yen appreciates.</li></ul>

<ul><li>ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) is another long play on the yen. However, YCL should rise more than JYN if the yen appreciates.</li></ul>

Bearish: Traders who believe that the debt crisis drama in the Eurozone and the United States will not finish with a happy ending, which should hurt Japan's exporting sector may consider an alternate positions: 

<ul><li>ETFS Short Japanese Yen Long US Dollar ETC (Sterling) ETF (SJPP) is a short play on the yen. SJPP should rise if the yen depreciates. </li></ul>

<ul><li>ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) is another short play on the yen. However, YCS should rise more than SJPP if the yen depreciates.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Yen Weakens Despite Strong Economic Performance

The Japanese yen made gains against major rivals on Tuesday, following signs that the Japanese recovery is continuing. At the moment, the U.S. dollar lost 0.15% of its value to trade around ¥80.14, while the euro lost 0.64% to trade around ¥111.88.

The yen found support in better than expected economic activity data. According to the Ministry of Economy, Trade and Industry data, <a href="http://www.forexfactory.com/news.php?do=news&amp;id=303517">Japan's tertiary industry activity index</a> rose 0.9% in May, from a month earlier, which was above analysts' expectations of a 0.7% increase. The May value is still much below April's 2.5% rise. In April, however, the index rebounded strongly following the earthquake and tsunami that have caused havoc in Japan in March. 

The Japanese economy has been hit hard by natural disasters recently, which caused energy shortages and supply disruptions. An inadequate response from the Japanese government has forced Japan's prime minister to announce he will leave his post early. The latest results, however, will come as an encouragement to traders as Japan shows more signs that its economic recovery is gaining speed.

The Bank of Japan is still not convinced that Japan's economic recovery is on firm footing, so it decided to <a href="http://www.fxstreet.com/news/forex-news/article.aspx?storyid=499025e5-83bd-4edd-be04-3c72e9dac9b5">leave its interest rates unchanged</a> at 0.1%. The Japanese interest rates have very low for some time now, as inflation remained low. The latest data, however, points to a rising inflation. In June, <a href="http://www.financialnewsdaily.net/japan-jun-domestic-corporate-goods-price-index-yoy-up-to-2-5-vs-2-2-forexrazor/">Japan's corporate goods price index</a> rose 2.5%, compared to a year earlier. The June value was above 2.2% recorded in May and 2.4% expected by most analysts.

Rising inflation is generally a sign to start worrying about the economy overheating. Japan, however, has been fighting deflationary pressures for over a decade now. Japan's experience has suggested fighting deflation is much more difficult than fighting inflation. As a result, some analysts might see rising inflation as a good sign, since it might signal that the time of deflation is behind the world's third largest economy.

Japan's economic results might not seem spectacular, but when taken into comparison with the news from the Eurozone and the United States, Japan's economic data starts looking much brighter. In Europe, the Eurozone still did not resolve the Greek crisis and it seems the crisis has spread to Italy, the Eurozone's third largest economy. On Friday, the shares of the largest Italian banks fell sharply, and <a href="http://www.bbc.co.uk/news/business-14102285">their losses continued in Monday's trading</a> as well. In the United States, President Obama and his Democrats are locked in a battle with the Republicans, which control the House of Representatives, over raising the debt ceiling. If there is no agreement soon, the U.S. government might be forced to shut down, which could send massive shockwaves through the financial markets.

ACTION ITEMS: Bullish: Traders who believe that the Japanese recovery will continue gathering speed, which should provide a lot of tailwind for the yen, especially in the light of massive problems in the Eurozone and the United States, might want to consider the following trades: 

<ul><li>WisdomTree Dreyfus Japanese Yen Fund (NYSE: <a class="ticker" href="/stock/jyf#NYSE">JYF</a>) is a long play on the yen. JYF will rise if the yen appreciates.</li></ul>

<ul><li>ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) is another long play on the yen. YCL will rise more than JYF, however, if the yen appreciates.</li></ul>

Bearish: Traders who believe that there are still a lot of hurdles ahead for the Japanese economy, which might eat into the value of the Japanese currency, may consider an alternate positions: 

<ul><li>ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) is a short play on the yen. YCS will rise if the yen depreciates.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Japanese Yen Rises as Economic Recovery Continues

The Japanese yen edged a bit lower against the U.S. dollar on Friday, as the Japanese economy posted mixed results. At the moment, the greenback added 0.04% to its value to trade around ¥81.27. At the same time, the yen made some gains against the euro, as the European currency retreated 0.1% to ¥116.57.

The yen failed to perform today as Japan's economy posted mixed results. For instance, <a href="http://news.ninemsn.com.au/article.aspx?id=8270657">Japan's current account surplus</a> shrank by over 50% to ¥590.7 billion in May, but most analysts had expected a much bigger fall to ¥300 billion. Japan's exporters have been hit hard by energy shortages and supply disruptions, following the devastating earthquake and tsunami that have struck part of Japan. The May current account data indicates that the effects of the natural disasters are still felt on the Japanese exporters. At the same time, it seems as if the Japanese exporters are faring better than analysts had predicted.

Japan's bank lending also failed to impress. In June, <a href="http://uk.reuters.com/article/2011/07/07/japan-economy-lending-idUKT9E7HL02D20110707">Japan's bank lending</a> was 0.6% lower than in the same month a year earlier, which represents the 19th straight month of declines. The June value is an improvement on -0.8% recorded in May, but is still below analysts' expectations of -0.5%. Falling bank lending sends another sign that Japan's consumer confidence remains subdued. If Japan is to recover from the crisis caused by the double natural disaster, Japan's consumers will have to make a much bigger contribution. Even when supply disruptions and energy shortages problems are fully resolved, global demand will remain weak, as the Eurozone and the U.S. are fighting their own debt crises, so Japan's powerful exporters will probably not be able to bring Japan out of its current economic doldrums by themselves. 

If Japan's current account and bank lending data failed to impress, Japan's <a href="http://www.forexlive.com/blog/2011/07/08/japan-june-economy-watchers-survey-service-workers-index-49-6/">economy watchers current index</a> certainly made an impression. In June, the index rose to 49.6, from 36 in May, which represents the biggest gain on record. The June value also managed to beat analysts' forecast of 40 by quite a margin. The index provides an insight into workers' views about the health of Japan's economy. Even though the June value is still below the 50 points line, which indicates Japan's workers are still pessimistic about the prospects of their economy, the latest data clearly indicates that Japan has managed to turn the corner and that its economic recovery is quickly gaining speed.

Overall, the data published on Friday provided a mixed picture on the strength of the Japanese economy. While some data managed to beat analysts' expectations, suggesting the recovery is gaining ground, Japan's economy remains subdued. It has been fighting deflationary pressures and weak domestic demand for some time now, and with massive debt problems in the Eurozone and the United States, it seems unlikely that Japan's powerful exports sector will be enough for Japan to make a full recovery.

ACTION ITEMS: Bullish: Traders who believe that Japan's recovery is quickly gaining pace, which should provide some tailwind for the yen, might want to consider the following trades: 

<ul><li>JPY/USD Exchange Rate ETN (NYSE: <a class="ticker" href="/stock/jyn#NYSE">JYN</a>) is a long play on the yen. JYN should rise if the yen appreciates.</li></ul>

<ul><li>ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) is another long play on the yen. YCL should rise more than JYN, if the yen appreciates, however. </li></ul>

Bearish: Traders who believe that Japan has some way to go until making a full recovery, which should keep the value of the yen subdued for some time, may consider an alternate positions: 

<ul><li>ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) is a short play on the yen. YCS should rise if the yen depreciates.</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Japanese Yen Edges Lower on Mixed Economic Results

The Japanese yen made gains against the U.S. dollar and the euro on Wednesday, following a government approval of a new budget aimed at kick starting the reconstruction program in the Fukushima area. At the moment, the greenback lost 0.15% of its value to trade around ¥80.95. At the same time, the euro put up a bigger fight, falling 0.03% to ¥116.94.

The yen was supported by an announcement of another <a href="http://www.bbc.co.uk/news/business-14040830">budget</a>, valued at $24.7 billion, whose aim is to support reconstruction and provide compensations to the victims of the Fukushima disaster. Japan's PM Naoto Kan has been heavily criticized for his handling of the crisis. In fact, due to the immense pressure, the PM has been forced <a href="http://www.reuters.com/article/2011/06/04/us-japa-politics-idUSTRE7531AF20110604">to announce he will step down</a> by August. 

The earthquake and tsunami disaster have caused a lot of damage to Japan's economy by creating power shortages and supply disruptions. The latest move by the government will appeal to investors, as it shows the government's determination to resolve the crisis. At the same time, however, the new proposal needs to pass through the Japanese parliament. With such a weak and unpopular PM, even within his own party, it does not seem impossible that the proposal fails to pass the parliamentary vote.

Earlier today, the Japanese economy produced some good news that will encourage its politicians. In May, <a href="http://www.ibtimes.com/articles/20110706/japanese-leading-index.htm">Japan's leading indicators index</a> rose to 99.80, from 96.20. The rise was widely expected, however. The index is composed by combining different measures of overall economic health. Any values below 50 suggest most indicators are negative, while values above 50 suggest most indicators are positive.

Japan's economic growth has been sluggish for the past two decades. Even though the Japanese economy seems to be very strong at the moment, as the reconstruction programs start to kick in and supply disruptions are resolved, it remains to be seen for how long the Japanese economy can maintain such a momentum. One possible brake on its strength will be commodity prices. Japan is a commodity poor country and relies heavily on importing raw materials. In today's trading, the prices of oil and copper rose. At the moment, crude oil rose 0.95% to $97.72, while copper edged 0.06% higher to trade around $4.34.

Action Items

Bullish: Some traders will find the latest government budget as supportive of Japan's recovery. The government has made a number of bad steps in resolving the crisis, but this might be the required step forward. Traders who believe the new budget will help Japan build its economic momentum will be interested in:

•	CurrencyShares Japanese Yen Trust ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>) is a long play on the yen. FXY might do well if the yen appreciates. 
 

•	ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) is also a long play on the yen. YCL might do well if the yen appreciates. 

Bearish: Some traders will not be persuaded that a deeply unpopular government will be able to push through the new budget proposal. These traders might think that the political instabilities will take their toll on the Japanese currency and the best way to resolve them would be a new PM. Traders who find appeal in this scenario might be interested in:

•	ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) is a short play on the yen. YCS might do well if the yen depreciates.

Japanese Yen Rises on New Budget

The Japanese yen retreated against major currencies of Friday, despite improvements in unemployment and inflation data. At the moment, the U.S. dollar moved 0.18% higher against the yen to trade around ¥80.81. At the same time, the euro, rejuvenated after the Greek parliament voted in a package of deeply unpopular reforms, rose 0.28% to ¥117.18.

The yen fell in spite of some positive data coming from the Japanese economy today. For instance, <a href="http://www.businessweek.com/news/2011-06-30/japan-s-unemployment-rate-unexpectedly-fell-to-4-5-in-may.html">Japan's unemployment rate</a> fell unexpectedly in May to 4.5%, from 4.7% in April. Most analysts had expected the unemployment figure to rise to 4.8% in May.

At the same time, <a href="http://www.xydo.com/toolbar/23355625-japan_may_core_cpi_rises_0_6_pct_yr_yr_-_reuters">Japan's core consumer price index</a> managed to beat market expectations and rise 0.6% in May (year-over-year), when most analysts predicted it to be 0.5% above the value recorded a year ago. In April, Japan's price level was 0.6% higher than in April 2010. <a href="http://www.xydo.com/toolbar/23355625-japan_may_core_cpi_rises_0_6_pct_yr_yr_-_reuters">Tokyo's core CPI</a>, for which data are available a month in advance, remained 0.1% higher than a year earlier, the same as in May. In this case, however, analysts had predicted a slightly higher value of 0.2%.

In normal circumstances, rising inflation might a problem, since normally it would put pressure on the central bank to start tightening its monetary policy. Japan, however, has been fighting deflationary pressures for two decades and rising price level is a sign that domestic demand is rebounding. Japan has been recently hit hard by a double disaster, first the earthquake and then the tsunami, which has ravaged parts of Northeast Japan. The effects of these disasters are still felt, as they brought power shortages and supply disruptions, hurting the performance of Japan's manufacturing sector.

Falling unemployment, along with rising inflation, will certainly provide more proof for analysts that Japan is turning the corner. It might seem odd that these data did not reflect in the rising value of yen, however. One possible explanation is that the value of yen was pushed too high by the debt problems in the Eurozone and the United States in recent weeks. Following the successful resolution of the Greek debt crisis, at least for the time being, some analysts might be more encouraged that the American political elites will find a way to raise the U.S. debt ceiling, a measure desperately needed if the U.S. government is to avoid a shutdown. Resolution of debt problems in other parts of the world has just helped the yen to reach its "appropriate" value.

Another possible explanation is falling global demand. Japan has been one of the world's major exporters for some times now, and signs of global economic slowdown will have an adverse effect on the country's exporters, especially in manufacturing. Even though the worst case scenario has been averted in Greece, the Eurozone is still nowhere near to resolving its debt problems, while the impact of political fighting in the U.S., which threatens to shut down the government, has many analysts worried as well. Problems in the two largest economic blocks threatens to halt the recovery of the global economy, which pushed the prices of commodities lower. In today's trading, gold fell back below the $1,500 level, trading at $1,499.35, or 0.1% below yesterday's close, while silver lost 0.65% of its value to stand around $34.48. Fossil fuels also retreated, with crude oil down 0.32% to $94.63 and natural gas down 0.55% to $4.358. The price of copper remained roughly the same as yesterday's close, however, at $4.270.

Further fears about the prospects for Japan's manufacturers comes from the Tankan business sentiment index. In June, <a href="http://www.bbc.co.uk/news/business-13985726">the index</a> plunged to -9 from 4 in May. Readings above zero indicate optimism while readings below zero indicate pessimism. This is the first time in 15 months that the Japanese business people are mostly pessimistic about their prospects.

Traders who believe that Japan's domestic demand is turning the corner, indicated by the falling unemployment and rising inflation, which should provide a boost for the country's economy and its currency, will be interested in the CurrencyShares Japanese Yen Trust ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>), the JPY/USD Exchange Rate ETN (NYSE: <a class="ticker" href="/stock/jyn#NYSE">JYN</a>) and the ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>).

Other traders might be more interested in what is happening to global demand. Debt problems in the Eurozone and the United States might lead to a global economic slowdown, and falling commodity prices fit well into that story. Japan's economy depends a lot on the performance of its exporters. As a result, traders who believe in the scenario of falling global demand will be less optimistic about the prospects of the Japanese economy. These traders will be more interested in the ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>).

Japanese Yen Retreats Despite Falling Unemployment

The Japanese yen rose slightly against the U.S. dollar on Wednesday, following a strong rebound in Japan's industrial production. At around 6 am GMT, the greenback lost 0.07% of its value to trade around ¥81.065.

The Japanese currency found support in better than expected rebound in the country's industrial production. In May, <a href="http://www.businessweek.com/news/2011-06-28/japan-s-factory-output-rises-at-the-fastest-pace-since-1953.html">Japan's industrial production</a> grew by 5.7%, compared to a month earlier, significantly higher than 1.6% recorded in April. Analysts had predicted a bit weaker rebound of 5.5%. At the moment, Japan's industrial output is recovering at the strongest pace in more than 50 years.
 
The news will be welcomed by analysts as another sign that Japan is recovering from the effects of the natural disasters, which have caused power shortages and supply disruptions. If these disruptions continued for a while, an increasing number of Japanese companies might be inclined to shift production away from Japan.

The rebound was especially strong in <a href="http://www.businessweek.com/news/2011-06-28/japan-s-factory-output-rises-at-the-fastest-pace-since-1953.html">car manufacturing</a>, which grew by 36%. Japan's automotive industry was especially hard hit by recent shortages of parts and power, with Toyota and Nissan being forced to halt production in their factories. The news will be welcomed especially by <a href="http://www.bbc.co.uk/news/business-13939727">Toyota</a>, which had its rating downgraded by Moody's from Aa2 to Aa3. 

Japan's recovery has provided a tailwind for other Asian currencies. The biggest winners against the greenback in today's trading so far are the Thai baht (up 0.48% to 30.8250), the South Korean won (up 0.47% to 1076.62) and the Taiwanese dollar (up 0.19% to 28.8980).

The East Asian currencies even managed to shake off rising commodity prices. The East Asian countries rely heavily on importing raw materials. As a result, rising commodity prices will put pressure on their trade balance. In today's trading, natural gas is the only major commodity whose price declined. At the moment, natural gas trades around $4.344, or 0.44% below yesterday's close. Gold is still above the $1,500 line, after rising 0.3% to $1,506.05. Silver is up 0.66% to $34.15, while crude oil added 0.15% to its value to trade around $92.92. Finally, the price of copper rose 0.24% to $4.121.

Traders who believe the industrial production data in Japan is a definite proof that Japan's economy has turned the corner will be highly optimistic about the yen's prospects, especially in light of debt problems in the Eurozone and the United States. As a result, these traders will be interested in the CurrencyShares Japanese Yen Trust ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>), the JPY/USD Exchange Rate ETN (NYSE: <a class="ticker" href="/stock/jyn#NYSE">JYN</a>) and the ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>). 

Other traders might be skeptical about Japan's long term outlook. Even if the worst effects of the tsunami/earthquake disaster are behind us, the Japanese economy is still marred by political instability, with new elections looming. Furthermore, deflationary pressures, which have been hurting the performance of Japan's economy for two decades, are not resolved. As a result, some traders will be more interested in shorting the yen, e.g. in the ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>).

Japanese Yen Rises on Rebounding Industrial Production

The Japanese yen fell against the U.S. dollar on Monday, as the Japanese exports slump in May. At the moment, the U.S. currency rose 0.22% to trade around ¥80.22.

The Japanese currency seems to suffer from weak trade data. The <a href="http://uk.ibtimes.com/articles/165598/20110620/japanese-merchandise-trade-balance.htm">data published on Monday</a> shows that Japan's adjusted merchandise trade balance was in a ¥474.6 billion deficit in May, compared with a revised deficit of ¥469.6 billion a month earlier. 

The current trade data clearly shows that Japan is still fighting to shake off supply disruptions that have marred its industrial production since the outbreak of the earthquake/tsunami disaster. Japan's merchandise trade exports slumped by 10.3% in May, compared to a year earlier. In April, Japan's exports declined by 12.5%. Japan's merchandise trade imports, on the other hand, rose 12.3% during May.

The slight deterioration in Japan's trade balance was not enough to turn the tide in favor of the European currency, however. At the moment, the euro lost 0.384% of its value to stand around ¥114.16. The European currency is still suffering from the crisis in Greece.

The Greek crisis should be the main focus of today's trading, as the major industrial countries are not expected to report much new data about the state of their economies.

Traders who believe the supply disruptions will continue to cause problems for the Japanese exporters, which should provide a lot of headwind for the yen, will be interested in the ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>).

Other traders might think that the Japanese economy will resolve its energy problems soon, which should provide a significant boost to its economy. The Japanese economy has been operating at a subdued level for some time now. When the supply disruptions problems are resolved and the government reconstruction program takes full effect, the Japanese economy should rebound quickly, providing a tailwind for the yen. Traders who believe in this scenario will be interested in the JPY/USD Exchange Rate ETN (NYSE: <a class="ticker" href="/stock/jyn#NYSE">JYN</a>) and the ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>).

Japanese Yen Falls Against U.S. Dollar on Plummeting Exports

The yen strengthened against the U.S. dollar on Friday after the Japanese tertiary sector activity rebounded in May.

At around 6 am GMT, the greenback lost 0.3% of its value to trade around ¥80.1250 against the Japanese currency. The yen was pushed higher by news of a strong rebound in its tertiary sector. According to <a href="http://www.stockmarketsreview.com/news/152082/">METI</a>, Japan's tertiary sector activity rose by 2.6% in May, following a 5.9% fall in April. Analysts were predicting a slightly stronger rebound of 2.7%, however.

The tertiary sector activity data follows a string of encouraging data for the Japanese economy. On Thursday, the Japanese economy provided some reassurance to traders as its first quarter growth was revised upwards, even though the upgrade did not change the fact Japan is in a recession. At the same time, Japan's manufacturing sector is on its way to recovery as the machine tool orders were driven higher by strong overseas demand. 

The Japanese economy is still a long way to full recovery, however, after some parts of Japan were devastated by natural disasters, which also created supply problems for the whole Japanese economy. This gloom was seen in a recent IMF report on Japan, where the IMF stressed its belief that the Japanese economy will shrink in 2011, before rebounding in 2012.

Across the Sea of Japan, the <a href="http://www.bbc.co.uk/news/business-13723337">Korean central bank</a> took analysts by surprise and raised its interest rates to 3.25% from 3%. The Bank of Korea seems to be agitated, according to BBC, by inflation levels, which have been above the central bank's 2%-4% target for some time now. 

In spite of an increase in interest rates, the Korean won lost some ground against the U.S. dollar. At around 6 am GMT, the U.S. dollar rose 0.26% to 1082.90 against the won.

The Korean economy is exports-oriented and if interest rates continue to rise, pushing the value of the won higher, the country's exporters will start to lose their competitive edge. This is a scenario the Korean authorities will surely like to avoid.

Traders who believe that the Japanese economy will be subdued for some time, which should provide a lot of headwind for the Japanese currency, will be interested in the ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) and the ETFS Short Japanese Yen Long US Dollar ETC (Sterling) ETF (SJPP).

Some traders might read a recent string of good economic results as a sign the Japanese economy might be recovering more quickly than analysts had previously predicted. Stronger Japanese recovery should provide additional steam to the yen. As a result, these traders will be interested in the JPY/USD Exchange Rate ETN (NYSE: <a class="ticker" href="/stock/jyn#NYSE">JYN</a>) and ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>).

Traders who believe the Korean central bank's action is just another sign of how strong the Korean economy is will be interested in the iShares MSCI South Korea Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>).

Other traders might be worried that the Bank of Korea has kept the interest rates too low for too long, which will create long-term problems in containing inflation. These traders will probably be eager to avoid IQ South Korea Small Cap ETF (NYSE: <a class="ticker" href="/stock/skor#NYSE">SKOR</a>).

SKOR

Yen Rises on Rebound in Tertiary Sector Activity, Korean Won Falls Despite Interest Rate Rise

The Japanese yen fell against the euro and the U.S. dollar on Thursday in spite of an upward revision in Japan's March quarter GDP growth. 

The <a href="http://www.seattlepi.com/business/article/Japan-GDP-shrank-a-shade-less-than-first-thought-1416122.php">revised data</a> showed that the Japanese economy contracted in the first quarter by 3.3% on an annual basis. The first estimates pointed to a sharper fall of 3.5%. Analysts were expecting the upward revision to be even higher, however.

The new data does not change the fact that Japan is still in recession and the smaller upgrade in the Japanese Q1 GDP growth rate falls well into <a href="http://www.bbc.co.uk/news/business-13696065">the new IMF forecast</a> of a negative growth for the Japanese economy this year. The IMF predicts the Japanese economy will contract by 0.7% this year, down from the previous estimate of a 1.4% growth. The IMF named the devastating earthquake and tsunami as the reason for its downward revision. The IMF also pointed to the quick rebound in 2012, however, as all supply disruptions are resolved and the government reconstruction program takes full effect.

The yen lost ground in today's trading against the U.S. dollar and the euro. The greenback added 0.085% to its value and is trading around ¥79.94. At the same time, the euro made even bigger gains, rising 0.314% to ¥116.83.

The yen failed to find strength in stronger machine tool orders. According to the <a href="http://e.nikkei.com/e/fr/tnks/Nni20110609D09SS322.htm">Japan Machine Tool Builders' Association</a>, the machine tool orders rose annually by 34.2% to ¥108.16 billion in May, up from 32.3% recorded in April. The data represents the 18th consecutive monthly increase. The May data was driven primarily by stronger overseas demand, which expanded by 45.6% to ¥75.64 billion. May represents the 19th consecutive month of growth in overseas demand. Domestic demand grew as well, but at a slower pace. Domestic demand increased by 13.4% to ¥32.51 billion, marking the 18th consecutive month of rising machine tool orders.

The Japanese economy depends a lot on the performance of its exporters, above all in the manufacturing sector. Constant improvement in machine tool orders should, therefore, provide some relief to investors about the health of the Japanese economy.

Traders who believe the IMF prediction will be right and that it will take some time for the Japanese economy to fully recover from the earthquake/tsunami disaster, which should keep the value of the yen subdued for some time, will be interested in the ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) and the ETFS Short Japanese Yen Long US Dollar ETC (Sterling) ETF (SJPP). 

Some traders will be encouraged by continuing improvements in Japan's manufacturing sector and will believe the recovery of the Japanese economy will come sooner than the IMF predicts, which should boost the value of the Japanese currency. These traders will be more interested in the JPY/USD Exchange Rate ETN (NYSE: <a class="ticker" href="/stock/jyn#NYSE">JYN</a>), the ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>) and the WisdomTree Dreyfus Japanese Yen Fund (NYSE: <a class="ticker" href="/stock/jyf#NYSE">JYF</a>).

Yen Falls Despite Upward Revision in Japan's Q1 GDP Growth 

The Japanese yen rose against the euro and the U.S. dollar on Wednesday. At the moment, the euro lost 0.532% of its value against the yen and is trading around ¥117.01. At the same time, the greenback lost 0.255% against the Japanese currency and is standing at ¥79.88.

The Japanese currency was supported by better than expected economic data. On Wednesday, Japan's <a href="http://www.forexlive.com/blog/2011/06/08/japan-data-economy-watchers-index-from-the-cabinet/">Economy Watchers Current Index</a> rose from 28.30 in April to 36 in May. Not only that the index of perceived economic activity is increasing, it is also beating analysts' expectations, since most analysts expected the index to rise to 33 in May. The index shows that more workers are optimistic about the Japanese economy in May than they were a month ago. The index is still below 50, however, which indicates that the majority still feel pessimistic about the economy. Japan's economy is recovering not only from the financial crisis, but also from the effects of a devastating earthquake and tsunami that ravaged through northeastern parts of Japan. 

The yen found additional strength in the trade balance data. In April, the Japanese economy reported <a href="http://uk.news.yahoo.com/japan-current-account-surplus-slumps-recovery-seen-003346513.html">Japan's surplus</a> fell 69.5% on an annual basis. Even though the Japanese surplus fell steeply in April compared to March, when the surplus was 34.3% below the value recorded in March 2010, analysts were expecting the April surplus to be 84.3% lower than a year earlier. The recent earthquake and tsunami had shaken Japan's energy distribution, which led to supply disruptions. Stronger than expected trade balance results will probably provide more comfort to investors that the Japanese economy is recovering from the earthquake/tsunami disaster more rapidly than previously though.

The Japanese economy is not producing only good news, however. According to the <a href="http://english.cntv.cn/20110608/109024.shtml">Bank of Japan</a>, Japanese banks' lending fell in May by 0.8% from a year earlier, which represents the 18th month in a row of declining lending. The figure is still better than an annual lending fall of 1% reported in April.

Taken together, the data published on Wednesday suggest the Japanese economy is recovering from the effects of natural and financial disasters that have struck Japan. Some data came ahead of market expectations, which will probably be an encouraging sign for the investors. 

The Japanese economy remains weak, however, with economic activity sentiment data still pointing to widespread pessimism and the Japanese trade surplus still declining. The Japanese economy is export-oriented and falling trade surplus will not bring too much joy to investors. 

Traders who believe that recent data indicate that the Japanese economy is recovering at a faster pace than previously thought, which should provide some steam for the yen, will be interested in the CurrencyShares Japanese Yen Trust ETF (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>), the JPY/USD Exchange Rate ETN (NYSE: <a class="ticker" href="/stock/jyn#NYSE">JYN</a>) and the ProShares Ultra Yen ETF (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>).

Other traders will point to continuing weakness in the Japanese economy. With the economies of Japan's competitors looking healthier at the moment, these traders will probably be more eager to short the yen. As a result, they would like to keep an eye on the ProShares UltraShort Yen ETF (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>) and the ETFS Short Japanese Yen Long US Dollar ETC ETF (<a class="ticker" href="/stock/sjpy#">SJPY</a>).

SJPY

Japanese Yen Rises as Japan's Economic Performance Improves

The Japanese yen added some value against other major currencies in spite of Japan running a trade deficit in April. According to <a href="http://www.customs.go.jp/toukei/shinbun/trade-st_e/2011/201104ce.xml">government data</a>, Japan imported ¥463.698 billion worth of goods more than it exported. April's exports declined 12.5% year-over-year, while imports rose 8.9%. Analysts anticipated Japan will run a trade deficit, as its economy is still being hit by the effects of earthquake and tsunami. The Japanese currency, however, managed to add some value against the euro and the U.S. dollar. At the moment, the U.S. dollar is trading at ¥81.82, or 0.171% below yesterday's close, while the euro is worth ¥114.82, or 0.663% less than yesterday. 

Traders who believe the yen will continue to rise against its European and American rivals will be interested in the WisdomTree Dreyfus Japanese Yen (NYSE: <a class="ticker" href="/stock/jyf#NYSE">JYF</a>), the iPath JPY/USD Exchange Rate ETN (NYSE: <a class="ticker" href="/stock/jyn#NYSE">JYN</a>) and the Ultra Yen ProShares (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>).

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