Alpha Diallo
All posts from Alpha Diallo
Alpha Diallo in Alpha Diallo,

Yen soars on GDP Figures

GDP figures from Japan missed expectations and the Yen is soaring. Japan’s economy in the second quarter only expanded a lousy 0.6% compared to expectations of 0.9% growth. Business investment was down, but consumer spending remains strong. The disappointing GDP figure suggests that
Prime Minster Abe will not go along with the planned increase in sales tax. The
planned 3% hike in sales tax was an indicator of the strength of the Japanese
economy. He may fear hurting the only positive sign that is fueling the economy, consumer spending.  

The proposed tax hikes was an attempt to bring fiscal balance against the extreme easing of monetary policy by Prime Minster Abe. Forget about fiscal balance now. The Japenese economy clearly showed signs of weakness and its currency is rising, I do not get it. In current trading,the USDJPY is up 26%.