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The Yen slightly fell and then quickly rallied against the US Dollar after Japan's soft GDP statistics crossed the wires. The fourth quarter preliminary print was a contraction of 0.4 percent, lower than the -0.2 percent expectation and the prior's reading of 0.3 percent growth. The annualized figure for the same period was a decline of 1.4 percent, worse than the -0.8 percent consensus forecast and the revised prior of 1.3 percent.

The Nikkei 225 index gapped higher when the Japanese stock market opened ten minutes after the news-flow. The safety-linked Yen has been strengthening since the beginning of the year due to risk aversion. The unit's gains has caused the financial markets to speculate if the Bank of Japan will provide further stimulus in order to reach its 2 percent inflation target. A stronger currency may delay the time it takes for the BoJ to reach its objective. Traders' forward-looking anticipation of oncoming central bank accommodative policy may have led to the equity index's rally.

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