The yen touched the lowest level in a week against the dollar after the Bank of Japan maintained unprecedented monetary stimulus as the U.S. Federal Reserve moved toward raising borrowing costs for the first time since 2006.
Our casual evidence indicates that government spending boosts gross domestic product during recessions. But we don’t really have a satisfying, formal, modern, rigorous, academic macroeconomic model that explains this fact.
The dollar got its first “snack” of volatility with the just-released revision to Q3 GDP in the world’s largest economy. The report came out far better than expected, with Q3 growth revised up to 3.9% annualized
Following in the wake of today’s decent US CPI report, there is a chance core inflation could come in hotter than expected in Great White North, though the persistent fall in oil prices will keep a lid on headline inflation.
The yen dropped to a seven-year low against the dollar as investors bet Japan’s Prime Minister Shinzo Abe will win an early election, renewing his mandate to pursue stimulative monetary policy and structural changes.
Japan’s economy has had a wild first 48 hours of the trading week. An abysmal Q3 GDP report, PM Shinzo Abe has pushed back next year’s planned sales tax hike and called for snap elections to take place in less a month to consolidate his political power.