Japan Enters Recession for the First Time Since 2001
Posted on 19. Nov, 2008 by admin in JPY Economic News, Japanese Yen, Japanese Yen Currency
Japan’s economy, the world’s second largest, slipped into recession for the first time since 2001 as companies cut back spending. Japan’s recession could last even longer than feared and reflects an increasing effort by governments to provide a cushion against a global downturn.
What the market is seeing here doesn’t represent fundamental data, but a crutch. Worried investors are still moving away from high yielding currencies and risky assets. Investors move out of these riskier positions and are using the JPY as the fall back, fueling demand and appreciating the JPY against its pairs.
Looking ahead to today, there is no significant data scheduled from the Japanese economy, and the JPY isn’t giving any signs of halting its recent movement. However, traders should bear in mind that when an abnormal activity is taking place, it is usually an irrational reason which eliminates it. This is why a reversal, or at least a correction, may be expected in the coming days.
