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Abe knocks USD/JPY from 117- just some stop hunting?

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 spending”.
  • 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:

USDJPY down as Abe announces delay in tax hike dissolution of parliament November 18 2014

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.