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JPY volatile session after Japan unexpectedly falls back into recession – BTMU

FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ comments on the increase in volatility in Yen after weaker than expected Q3 GDP report revealed that Japan fell back into technical recession.

Key Quotes

“The yen sold off initially following the release of the GDP report with USD/JPY rising to an intra-day of 117.05, but has since rebounded with USD/JPY falling to an intra-day low of 115.46.”

“The report has at least temporarily undermined investor confidence in the potential success of Abenomics policies which has also resulted in the Nikkei 225 index falling by around 3.0% overnight.”

“The government is likely to announce an extra budget for the current fiscal year to support economic growth after Economy Amari stated that he “sees a high chance of a Japan economic package being needed”.”

“The BoJ has also recently accelerated easing which should prove supportive for economic growth. Overall, the main domestic drivers of the yen continue to remain negative.”

Yen strengthens against majors

The Japanese Yen is trading strong against most of the major currencies except the New Zealand Dollar, tracking weakness in the US Treasury yields and a fall in equity markets across globe.
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