Yen hits new 7-year lows on fresh speculation – TradeTheNews
Topic: Yen hits new 7-year lows on fresh speculation – TradeTheNews
FXStreet (Barcelona) - The TradeTheNews Research Team notes the rumours of a snap election and the delay in implementing a sales tax hike weakening the Yen to a 7-year low.
“USD/JPY tested fresh 6-year highs around 116 in early trading after a Sankei report citing unnamed cabinet advisors said that Abe would push back the sales tax increase to Apr 2017, dissolve parliament later this month, and hold elections in December.”
“A number of officials have since weighed in on the renewed speculation. BOJ adviser Kawai said the delay could make BOJ's decision harder by hurting fiscal trust by diminishing attractiveness of govt bonds.”
“Abe's economic adviser Honda is in favor of a delay as it would help facilitate achieving 2% inflation target. Typically fiscally conservative Fin Min Aso said it would be hard to fund social welfare without tax rise to 10%.”
“Finally, chief cabinet sec Suga once again refuted the rumors, stating there has been no change in the official stance the govt would study Q3 GDP results before making a decision. USD/JPY had retraced its gains below 115.50 on those Suga comments in the afternoon session.”