Buy the rumor, sell the fact? As Japanese PM Shinzo Abe takes the stage, USD/JPY falls quite quickly from almost 117 to 116.40, before the pair bounces back. He begins confirming reports about the sales tax, that previously sent the pair up.
Is it just some stop hunting before the next move up? More to come.
PM Shinzo Abe annoucnes:
- Decided to delay the sales tax increase by 18 months to April 2017.
- Abe promises he will not delay the tax hike again in 18 months.
- Cannot abandon plan of restoring fiscal health.
- “I have been following the trend of consumer spendingâ€.
- Parliament to be dissolved on November 21st – that’s Friday.
- He acknowledges that you can’t squeeze blood from the stone – cant get rev from higher taxes if it kills demand.
- 3 arrow policies showing increasing results
- Abenomics hasn’t failed
- A positive economic cycle is beginning to emerge.
- Extra budge will be submitted to parliament next year.
- Loss of majority would be a rejection of Abenomics.
USD/JPY has certainly been erratic of late, and also yen crosses have been interesting, with EUR/JPY just breaking to new highs.
Here is how it looks on the chart:
