Japan’s prime minister Shinzo Abe, took the stage to present new stimulus (sometimes called Abenomics 2.0). He pledged to enlarge Japanese infrastructure exports to 30 trillion yen by 2020. Abe wants to bring capital spending to an annual level of 70 trillion yen.
USD/JPY, which already slid from the highs of 102.62 before the publication, is now extending its falls below 102.40.
Perhaps the market had expected a more ambitious stimulus program, following the first program presented when the government just began working. In addition, the bold QE program from the BOJ, presented on April 4th, also contributed to higher expectations.
Yen bears need growing doses of stimulus (either fiscal or monetary) each time.
Earlier in the day, Japan presented more impressive economic numbers, that joined the better than expected GDP figures released beforehand. Japanese core machinery orders jumped by 14.2% in March. Seasonally adjusted, this is jump of 14.2%. This was the biggest month-on-month leap ever reported. The series began in April 2005.
For more, see the USD/JPY forecast.
