The euro climbed 0.14 percent to 177.15 yen during Asian trade on Thursday, recovering slightly after a steep drop the previous day. Japan released data showing its current account surplus rose to 4,062 billion yen in August, well above estimates of 3,194 billion yen.
Japan’s current account rises
Japan’s Ministry of Finance reported the current account surplus for August at 4,062 billion yen, surpassing the consensus forecast of 3,194.6 billion yen and the previous reading of 2,988 billion yen. This increase reflects a widening in Japan’s external position for the month.
Bank of Japan policymaker Ayano Sato said she supports raising interest rates in several stages. This remarks signal some openness within the central bank toward gradual tightening despite ongoing economic uncertainties.
France targets lower deficit
France aims to reduce its budget deficit to 5.0 percent of GDP in 2027 from 5.4 percent this year. Analysts noted that even this planned reduction faces political and public resistance ahead of the presidential elections scheduled for 2027.
Presidential candidate Marine Le Pen has promised 140 billion euros in spending cuts in the annual budget, though markets doubt a minority government could pass such measures without compromise. Nomura analysts see possible routes for Prime Minister Lecornu to secure budget passage, including opposition party compromises or using Article 49.3, but political risks to the euro remain elevated.
Market positioning on euro and yen
Data from the Commodity Futures Trading Commission showed speculators increased their net short position on the euro by 10,922 contracts to 63,256 contracts as of 29 September. Meanwhile, net long positions on the Japanese yen decreased by 16,542 contracts to 55,440 contracts over the same period.
Source: Bank of Japan · Japan’s Ministry of Finance | Data: CFTC
