The economy of Japan is still stuck in a recession.
Japan has the third largest economy in the world and has shrunk three quarters in a row.
Since Japan is still in a recession and needs more growth, Shinzo Abe and the BOJ could be convinced, even more, at the need of implementing more quantitative easing efforts. With a weakening Yen and more weakness expected, some are hopeful that the weak Yen will help Japan’s economy, as early as Q1 on 2013. The weakness of then Yen may take a little while to manifest positively in the Japanese economy though.
International Criticism of the Bank of Japan
Japan has come under national criticism leading up to the G20 meetings in Moscow, Russia, according to Fox Business. “The BOJ is conducting monetary policy to achieve stability in Japan’s economy. It will continue to do so,” BOJ Governor Masaaki Shirakawa said in defense of Japan’s recent aggressive easing.
How Does This Apply to Forex Trading?
If you take a look at the USDJPY Daily chart, you will notice the USDJPY seems to be losing momentum. An even scarier sight for those who are long is the USDJPY weekly chart. If it falls a few pips lower, the technical short signal is going to be strongly bearish.
Fundamentals still suggest a weaker Yen though and we can’t ignore them. Hold tight and be patient!
Share your Yen thoughts below! Or any other comments you may have!
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