26 Sep 2013
Session Recap: Yen hammered; corporate tax cut, pension fund headlines weigh
FXstreet.com (Barcelona) - Weakness in the Japanese Yen two hours into the Tokyo session was the main theme, a move that caught traders by surprise, as it progressively got stronger with headlines over a decision in the corporate tax rate cuts and the chairman of Japan's pension fund to blame for the chaos in the currency.
The possible reduction in the corporate tax rate is part of a stimulus package of up to ¥5 trillion to counter-attack the possible negative effects of hiking the sales tax to 8% from 5%. The cut may reduce companies' annual tax payments by over ¥1 trillion, based on finance-ministry data, while the sales tax increase may generate an extra ¥8 trillion/year.
Other pairs excluding JPY-denominated were relatively quiet, consolidating majors gains vs the USD. The EUR/USD managed to hold onto its gains above 1.35, same applies for the GBP/USD, while the weak AUD/USD saw tedious trading with key 0.9370/75 tech level still acting as a magnet. On the equities space, the Nikkei was the star performer, not so much by the 0.5% modest gains, but because of the impressive comeback from -1.3%. On the calendar, there were no events to highlight.
Main headlines in Asia
Debt ceiling circus sign to keep selling USD?
Is the US too big to fail? The debt deficit debate…
EUR/USD, weekly close above 1.36 a tech game changer - JPMorgan
Yen collapses on corporate tax cut talk
Yen moves go viral, Japan's pension fund chairman due to speak
Yen crosses bid to the boots on corporate tax cut, pension funds headlines
The possible reduction in the corporate tax rate is part of a stimulus package of up to ¥5 trillion to counter-attack the possible negative effects of hiking the sales tax to 8% from 5%. The cut may reduce companies' annual tax payments by over ¥1 trillion, based on finance-ministry data, while the sales tax increase may generate an extra ¥8 trillion/year.
Other pairs excluding JPY-denominated were relatively quiet, consolidating majors gains vs the USD. The EUR/USD managed to hold onto its gains above 1.35, same applies for the GBP/USD, while the weak AUD/USD saw tedious trading with key 0.9370/75 tech level still acting as a magnet. On the equities space, the Nikkei was the star performer, not so much by the 0.5% modest gains, but because of the impressive comeback from -1.3%. On the calendar, there were no events to highlight.
Main headlines in Asia
Debt ceiling circus sign to keep selling USD?
Is the US too big to fail? The debt deficit debate…
EUR/USD, weekly close above 1.36 a tech game changer - JPMorgan
Yen collapses on corporate tax cut talk
Yen moves go viral, Japan's pension fund chairman due to speak
Yen crosses bid to the boots on corporate tax cut, pension funds headlines