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Japan GDP contracts, marks a technical recession – TradeTheNews

FXStreet (Barcelona) - The Research Team at TradeTheNews observe that the unexpected contraction in Japan Q3 preliminary GDP has taken markets across the globe on a wild ride, as the world's 3rd largest economy entered another technical recession with a 2nd consecutive quarter of falling growth.

Key Quotes

“A closer look at GDP components revealed private consumption - about 60% of Japan's economy - growing just 0.4% vs 0.8% consensus estimate.”

“USD/JPY jumped to 7-year highs of ¥117 on the release, but risk aversion took over and sent the pair back down below 115.50. Nikkei225 is down over 2.5% on the release, S&P500 futures down 10 handles or 0.5% below 2,030, US 10-yr yield is down 4bps below 2.3%, and gold rose above $1,190 - up $10 from the lows.”

“The surprise Japan GDP contraction should effectively seal the decision to postpone the 2nd round of consumption tax increase. Indeed, local press has already reported PM Abe will hold a special press conference tomorrow formally announcing that delay.”

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