Yen Falls as Japan Enters Recession

Japan is back in recession after its economy shrank in the first quarter of this year. According to government data, Japan's economy contracted by 0.9% on previous quarter, following a 0.8% decline in Q4 2010. Analysts were widely expecting Japan to slid back into recession. They were, however, expecting a slump to be milder. Most analysts predicted Japan's Q1 slump to be 0.5%. On an annual basis, Japan's economy shrank by 3.7%, when most analysts believed this fall would be 2%. Weak economic data affected the strength of the Japanese currency. The U.S. dollar gained 0.102% against its Japanese rival and is currently trading around ¥81.76. The euro made inroads into the yen as well, adding 0.117% to its value. At the moment, the euro stands around ¥116.54. Those traders who believe the Japanese economy will continue to be weak, which will undermine the strength of its currency will be interested in the ProShares UltraShort Yen ETF YCS or the Short Japanese Yen Long US Dollar ETC ETF (SJPY). Some traders will think the Japanese economy will rebound strongly after the reconstruction program, following devastating earthquake and tsunami, kicks in. These traders will be interested in the ProShares Ultra Yen ETF YCL or the JPY/USD Exchange Rate ETN JYN.