Thu, 19 May 2011 10:19:00 +0200

Japan Falls into recession after declining 3.7 in its GDP

FXstreet.com (Barcelona) - The Japanese economy has fallen more than previously estimated and has launched the Nippon country into its third technical recession in a decade after declining for second quarter in a row. The Yen has continued its decline against its majors counterparts today with the USD/JPY trading close to the 82.00 level.

Japanese GDP, declined at a 3.7% down year on year pace in the fist quarter, contracting for the second consecutive month, weighed strongly by the consequences of the strong earthquake and the following tsunami that hit the North -East coast of the Country in March.

"Analysts expect that the contraction may be even bigger in the second quarter as consumer spending and exports slump in response to the Japanese disasters," says Keagan York, Head of FX Strategy for Compass Global Markets. "Despite many analysts describing the numbers as 'shocking', USDJPY was hardly impacted by the news remaining in a tight 30 point range throughout the day in a sign that investors viewed the figures as a temporary phenomenon directly caused by the earthquake/tsunami disaster," York affirmed.