The purchase orders for manufactured goods in Germany rose 1.2 per cent in July. Moreover, the index of business environment published by the IFO improved more than had been expected. In September, the yen became strongest in a period of 3 and a half years, standing at 103.25 yen per US dollar on September 16, thanks to the Japanese economic recovery. In September 1999, the yen averaged 107.09 yen to a US dollar, higher than August when it averaged 113.10 yen per US dollar. The Japanese currency moved between 103.88 and 111.13 yen per US dollar.
Favourable factors are the following.
The announcement was made on the expansion rate of GDP, up 0.2 per cent on the previous quarter. This is higher than expectations, which put the economic growth rate of the island country at a negative 0.35 per cent. No move was to be taken in regards to augmenting liquidity by not absorbing the yen from the system following the dumping of the currency to intervene in the market. The industrial production index for August rose 4.6 per cent over prior month, higher than was expected by the market, which projected the rate at 3.7 per cent. Investors were becoming less concerned that the Bank of Japan will intervene in favour of the yen.