Japan's GDP set for biggest drop since 2014
Forex News

Closely monitoring effects of the virus and assure fiscal measures as needed

Japan Finance Minister Aso has crossed the wires, noting that the fundamentals that support domestic demand remain firm. Aso said that he would ensure that fiscal policy steps would be taken as needed to respond to the spreading coronavirus outbreak while closely monitoring its impact on the economy.

Aso told reporters after a cabinet meeting that economic fundamentals that supported domestic demand were holding steady although slowing global growth was affecting the manufacturing sector.

Aso made the remarks when asked about government data out on Monday that showed Japanese economy had suffered its deepest contraction since 2014 in the October-December quarter,

– Reuters. 

Key notes

  • We need to closely monitor the effect of the coronavirus on the economy.
  • Drop in Q4 consumption is less than after the 2014 sales tax increase.
  • Closely monitoring effects of the virus and assure fiscal measures as needed.

FX implications

Ris-off flows will continue to underpin the yen which could b a tailwind for USDJPY bulls intent of higher grounds through 110 the figure. 

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