At the end of Monday’s session the pair USD/JPY rose by 218 points or by 2.1% due to positive US labor market data released last Friday.
At the end of the trading session Japanese stock index Nikkei Stock Average rose by 4%, which is the best record of one-day trading since March. In General, Asian and European stock markets rose on Monday after Prime Minister Shinzo Abe won the elections for additional seats in the upper house of the Parliament. Now it will be easier for Mr. Abe to get approval of the expanded package of stimulus measures this autumn.
On Tuesday Shinzo Abe said that Tokyo will speed up implementing methods which will help the economy to come out of the deflation continuing more than a decade. He promised to accelerate the fall in prices with the help of easing monetary policy by way of introducing flexible fiscal policy and structural reforms.
With the opening of today's trading day the pair USD/JPY has been rising; at the opening the European session the pair grew by almost 60 points.
At the end of Asian trading session, stock index Nikkei Stock Average rose today by 2.5%, as investors closed short positions on the yen on rising expectations of the "decisive stimulus measures" by the Bank of Japan.
On Wednesday, Japanese government headed by the Prime Minister Shinzo Abe plans to announce downgrade forecast for GDP growth from 1.7% to 0.9% for the current fiscal year ending in March 2017. While, according to the survey by the Bank of Japan, inflation expectations of Japanese consumers in was the weakest since December 2012.
If Mr. Abe’s promises to take decisive measures will be implemented, the Yen may significantly decline in the currency market and the pair USD/JPY may grow in the short-term.