Technical analysis and trading recommendations - https://fxpcm.com/en/fx/usdjpy-yen-weakened-sharply-currency-market-12072016
The Japanese stock index Nikkei Stock Average on the basis of trading in Asia rose today by 2.5%, as investors close their short positions on the yen on expectations of growth "decisive stimulus" by the Bank of Japan.
As a result of Monday's USD / JPY pair added 218 points, or 2.1% due to a strong report on the US labor market released on Friday. Japanese index Nikkei Stock Average finished trading growth of 4%, showing a better day trend since March. In general, Asian and European stock markets rose on Monday after the ruling coalition of Prime Minister Shinzo Abe has won the election additional seats in the upper house of parliament. Thus, Abe will be easier to get approval this autumn expansion pack stimulating fiscal policies.
After Shinzo Abe on Tuesday said that the government "will add speed" in the way in which the economy will emerge from more than a decade of deflation, the yen continued to decline in value. Abe has promised to expand the cycle of falling prices easing monetary policy, a flexible fiscal policy and the implementation of structural reforms.
The government of Prime Minister Shinzo Abe plans to announce on Wednesday lowered the forecast regarding adjusted for inflation, the growth of Japan's GDP for the current fiscal year ending in March 2017, from 1.7% to 0.9%. And inflation expectations of Japanese consumers in the course of the Bank of Japan survey were the weakest since December 2012.
If Abe many promises about taking "decisive action" will actually be translated into reality, the yen may weaken significantly in the currency market, and the USD / JPY pair to grow up in a short time.