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According to Moody’s Investors Service, the coronavirus pandemic poses the biggest shock to the Japanese economy since the Global Financial Crisis (GFC).

Further points

Japan’s 2.7% growth rebound forecast for 2021, but the aggregate economic output will still remain about 5% below the pre-coronavirus baseline.

Japan’s real GDP forecast to contract by 6.5% in 2020.

Separately, Japanese Finance Minister Taro Aso was reported by Reuters, saying that the government has no immediate plan to issue ‘corona-bonds,’ or bonds specially issued to cover costs to combat coronavirus pandemic.

Market reaction

USD/JPY is inching a few pips higher to near 107.75 region, tracking the bounce in the US dollar across the board. However, the further upside appears elusive amid a 0.50% drop in the S&P 500 futures and mixed Asian equities.