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JPY fell to a new low as the economy falls into a recession - Scotiabank

FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at ScotiabankCFA, notes that JPY fell to a new low as the economy fell into a recession; increasing risk of election and sales tax delay but the USD/JPY upward trend is still intact.

Key Quotes

“JPY is flat to Friday’s close, after trading in a relatively wide range during the Asian session. Japan’s economy unexpectedly fell into a recession in the third quarter, posting a drop of –0.4%q/q and –1.6%q/q annualized GDP.”

“The release increases the risk of a December election and a delay in the implementation of the next leg of the consumption tax. We do not expect any further stimulus at this week’s BoJ meeting; but do expect USDJPY to continue on its upward climb.”

“USDJPY short‐term technicals: bullish—most studies warn of upside risk and are moving with patterns that suggest large USDJPY buying.”

“Support lies at 115.46; while resistance comes in at the recent high of 117.05.”

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