Yen slips after record trade deficit

The dollar bought 88.84 yen in Tokyo trade, from 88.56 yen in New York late Wednesday, while the euro was at 118.36 yen, from 118.00 yen.

The euro was up to US$1.3320 from US$1.3315 ahead of the release of eurozone economic data later in the day.

Japan said it logged a record 6.92-trillion-yen (US$78 billion) deficit in 2012, as exports to China and the European Union tumbled, but the gloomy data fell within economists' expectations.

“Although trade deficits have been one of the factors pushing the yen down, most of them had been priced in by the market,” said Minori Uchida, chief forex analyst at the Bank of Tokyo-Mitsubishi UFJ.

Japan's trade deficit was unlikely to keep widening in 2013 as exports to China should pick up, with a spike in energy imports abating, Uchida said.

Japan's power bills have soared as it turned to pricey fossil-fuel alternatives after switching off its nuclear reactors following the crisis at Fukushima in 2011.

“We see 2012 as the worst and the trade account could improve slightly in 2013, although there is a long way to go before we have a trade surplus,” Uchida told Dow Jones Newswires.

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