Bank of Japan: Economic Conditions Have Deteriorated Significantly
This guest post provided by Sensa.
In mid March, the Bank of Japan (BOJ) released a bleak economic outlook for Japan, saying that conditions have deteriorated significantly and are likely to continue to deteriorate. Exports, business fixed investment, and corporate profits have decreased, while unemployment is on the rise. Consequently, the BOJ said, production declined at a much faster pace.
In spite of the grim news and the expectation that Japan’s economy will remain troubled in the short-term, the yen has continued to appreciate in forex trading. Around the same time as the BOJ announcement, the Fed’s announcement that it would take further steps to buy long-term treasuries and extend the size of lending programs caused the yen to post big gains against the USD, falling below the key 96.00 level. Since the global financial crisis became top priority last fall, the USD/JPY has almost become a guaranteed profitable short forex trade as the yen has appreciated due to investors unwinding their carry trades and its perceived safe-haven status.