November 3, 2009
The JPY was scolded by its partners (USD, AUD, EUR, and GBP) as Japanese stocks yelled “Kamikaze!” and plummeted at their steepest pace in a month. Also, trouble seems to be brewing in their labor market as labor cash earnings marked their sixteenth straight month in declines.
Japanese labor cash earnings fell by 1.6% year-over-year in September, after sliding down by 2.7% in the previous month. Although the actual decline was less than expected, it shows that Japanese firms continue to implement wage cuts even as they increase hiring. Some speculate that the rising JPY is one of the major reasons forcing companies to adopt such cost-cutting measures.
Today, Japan’s economic calendar has the monetary base report due and this is not expected to have a big impact on the JPY’s price action. After rising by 4.5% year-over-year in September, Japan’s monetary base could post another increase this time. Meanwhile, no high-impact reports are due from the US today, which means that we might see a relatively quiet trading day.
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