FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, remarks the probability of further downside for the Japanese currency.
"The period after the release of Q2 GDP data was always going to be the testing time in Japan on whether the next sales tax increase from 8% to 10%, due in October 2015, should be implemented. Etsuro Honda, advisor to PM Abe now says the increase is risky."
"Earlier this year Honda stated that the second increase was possible if real GDP growth was over 3.0% in Q3. This debate could intensify over the coming months and any sense of a delay (rather than abandonment) would be equity supportive and yen negative."