Entering its first recession in seven years, the land of the rising sun showed viable contraction in the previous quarter according to the Cabinet Office.  Gross domestic product for the world’s second largest economy shrunk a relatively surprising 0.4 percent on an annualized basis.  Second quarter results were revised to show a massive decline of 3.7 percent.  Comparatively, the growth shortfall was more than had been anticipated by the market, as most traders and market participants expected a mild upturn to flat growth and all but confirms a global recessionary slow down is well under way.  Major domestic companies have cut profit outlooks, both short and long term, as manufacturing firms continue to postpone capital investments.  As a result, with recessionary conditions well founded, currency traders continued to pound the US dollar, selling it off against the Japanese Yen.  After reaching a high of 97.53 pre-announcement, the Yen continued to strengthen to 96.37 through the London open and looks to be soft heading into New York morning trade.

Tags: GDP, Japanese Yen

This entry was posted on Monday, November 17th, 2008 at 10:11 am and is filed under Currency Trading, Economic Indicators, Japanese Yen. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.