WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Yen Plunges on Tax Delay Report, Low Liquidity

Posted by Joseph Trevisani on Nov 11, 2014 12:30:00 PM

A Reuters report that Japanese Prime Minister Abe was considering delaying a planned sales tax increase sent the yen plummeting to a seven year low at 116.10.

The news story hit the market just after the European open. Citing an unnamed "government official close to Abe's office", it said that the government was likely to delay the tax increase, "judging that the economic recovery remains too fragile to weather a further blow". 

"There's a high probability that the consumption-tax hike will be delayed," the person told Reuters. "It looks like the government will begin full-fledged consideration of this."

Another source noted that the delay could be for as long as 18 months. 

The government was also said to have begun preparing for a snap election to take advantage of the popularity of the tax delay, two-thirds of the Japanese public are opposed to the increase. Several ruling party LDP legislators confirmed that planning is underway but Prime Minister Abe later denied that is the case. 

Reuters had reported the same information about the tax and election plans early Sunday New York time but they garnered no market reaction. 

The U.S. bond market is closed today for the Veteran’s Day holiday, stocks are open.

Joseph Trevisani

Chief Market Strategist

WorldWideMarkets Online Trading

Charts: Bloomberg

yen min nov 11

yen nov 11


Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

Browse our frequently asked questions and find your answers right away.

Access to the educational lessons, webinars and platform walkthroughs.


Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!