What is this? The 19th century?
What a move in the yen today. It's absolutely crumbling.
The obvious headline to point to is Q4 GDP, which was a shocking -6.3% annualized contraction. A bad reading of -3.8% was expected because of the sales tax hike but this was a truly bad number.
Despite that, the market seemingly didn't care on Monday or Tuesday -- as if the news hadn't yet arrived from overseas.
What broke the market's back was today's machine orders numbers, which fell 12.5% m/m in December. That's a give-back from the +18.0% rise in November but it was still worse than the -8.9% reading expected.
The first quarter is increasingly looking like a negative one and that will put Japan right back into recession and who knows what the BOJ will do this time.
The kicker in the move in some yen crosses is technical, particularly in USD/JPY where the January high broke and the pair quickly jumped to a 9-month high with little in the way or resistance until 112.40.
The gain in the pair today is the largest since August and it's not just a dollar move. The moves against the other commodity currencies and the euro are massive.
