BoJ Amamiya: Japan’s economy expected to show clearer recovery through 2022

Bank of Japan’s Masayoshi Amamiya said that Japan’s economy has stagnated but is expected to show clearer recovery through next year.

The comments follow today’s Gross Domestic Product (GDP) that, quarter-on-quarter basis, fell 0.9%, slightly worse than the initial reading and median forecast for a 0.8% drop.

Japan’s economy shrank 3.6% in the third quarter, worse than the initial estimate of a 3.0% contraction, revised government data showed on Wednesday, posting a decline as private spending took a hit from a resurgence in COVID-19.

Separate data due on Dec. 10 at 8:50 a.m. (Dec. 9 at 2350 GMT) is expected to show wholesale inflation accelerated further to a new 40-year high, according to Reuters. ”The corporate goods price index likely gained 8.5% in November from a year earlier, after rising 8.0% in October.”

USD/JPY analysis

From a daily perspective, the price is stalling at a 38.2% Fibo and could easily flip to the downside at this juncture: