Wednesday, December 12, 2012

Japan officially in recession; USD/JPY testing resistance level

Japan's second quarter GDP was revised from +0.1% to -0.1%. This barely makes a difference to Japan's overall economic situation, other than the fact that it puts it officially in recession (two consecutive quarters of declining GDP).

Source: Tradingeconomics

The yen remains relatively weak on these fundamentals, although technically USD/JPY has not been able to break the current resistance level. USD/JPY appreciation is held back by large spec short yen positions (see discussion) that cover as the yen hits certain levels.

JPY per one dollar (source: Forexpros)
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