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The Yen has been weakening gradually for several months with slowly increasing risk appetite as we keep getting hopeful signs from US-Chinese trade talks.
More recently, on Monday, we got Q3 GDP numbers. These caught the market by surprise showing significant growth in output. The news helped fuel the retracement that the yen has been having against major pairs so far this month.
Tomorrow we have the release of manufacturing data. This could show improving outlook for Japan, which might give the pair some extra weight if the USDJPY tried to break through the 108.30 support level.
There is some optimism that we might get a break in the trend this time around. But, there are some mitigating factors that have led many economists to expect disappointment.
What We Are Expecting
There are two extraordinary factors that could drag down the Tankan index this time.
The first is the impact of the sales tax hike in October. The second is the economic impact of Typhoon Hagabis.
This would imply ...
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