Japan Eco-Watchers Survey Disappoints, Yen Strengthens Across The Board as Stocks Tumble Lower

The Japanese Eco-Watchers survey slipped to a seven year low of 28.0 from 28.3 in August as the economy teeters on the brink of a recession. Increased financial concerns paired with the slowdown in the global economy has lowered sentiment among Japanese merchants, and will be an growing concern for the Bank of Japan as inflation remains well above target. However, merchants were more optimistic about the future outlook as the index ticked higher to 32.1 from 32.0, which suggests that many are hoping that Prime Minister Taro Aso will indeed do a better job to help the economy. JPY crosses have tumbled on the 8% Nikkei fall, with renewed risk aversion emerging, thwarting some of the nascent gains seen in the EUR, GBP and CAD today. USD-JPY has slumped to lows of 99.87 on the back of the stock market decline, with the pressure on AUD-JPY taking AUD sharply lower from 0.7139 highs this afternoon to lows of 0.6880 and fresh lows since Q3 2004 with the ASX falling 5% and lowest in three years. AUD-JPY fell to 68.76 and fresh lows since 2003. EUR-JPY has plunged from highs of 138.07 this afternoon to 135.81 lows. GBP-JPY fell from highs just above 178.00 to lows around 174.90. NZD-USD tumbled 0.6262 to lows of 0.6117, and new trend lows while NZD-JPY fell from 64.00 to 61.46. CAD reversed all the gains made in Asia with the USD rising from 1.1020 ot 1.1077 as CAD-JPY came under selling pressure.

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