USD/JPY is showing limited movement on Tuesday, as the pair trades in the low-118 range. The yen remains at the lowest levels we’ve seen since August 2007. Will we see a 120 yen this week? On the release front, the BoJ Governor Kuroda said that the economy was on track to meet inflation targets, but noted that the yen was falling too quickly. In the US, GDP jumped 3.9% in Q3, beating expectations.
The US economic growth continues to rack up impressive numbers, posting an excellent gain of 3.9% in Q3, well above the estimate of 3.3%. This followed a gain in Q2 of 4.2%, which also beat the estimate. We’ll get a look at Consumer Confidence later in the day. The markets are expecting the indicator to improve in November, with an estimate of 95.9 points.
The struggling Japanese economy has officially slipped into recession, as GDP has posted two straight declines. In Q3, GDP declined -0.4%, well below the estimate of 0.5%. Prime Minister Abe responded by delaying an increase in the sales tax to 10%. Abe then surprised the markets by announcing elections halfway through his term. The upcoming election could end up as a referendum on Abenomics, which has involved sharp monetary easing and heavy government spending.
USD/JPY 118.16 H: 118.46 L: 117.69
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