Investing.com - The U.S. dollar traded lower against the Japanese yen during Wednesday’s Asian session as a possibly contentious tax debate looms in the world’s third-largest economy.
In Asian trading Wednesday, USD/JPY fell 0.18% to 98.04. The pair was likely to find support at 95.91, Monday’s low and resistance at 98.57, the high of August 6.
The greenback gained some steam against the yen Tuesday after after reports that Prime Minister Abe is looking at lowering the corporate tax rate as a way to offset a planned increase in sales tax.
Meanwhile, Japan's core machinery orders fell 2.7% in June from the previous month, government data showed Tuesday, less than expectations for a decline of 7.2%.
While a lower corporate tax would benefit already high-flying Japanese equities, the specter of a higher sales tax is what many market participants are focused with debate swirling around whether or not the Japanese economy is strong enough to absorb tax increases of any kind.
A higher tax burden could also dash Abe’s hopes of increasing domestic, part of the so-called third pillar of Abenomics, the prime minister’s economic revitalization efforts. Abe has requested his financial ministers further study the impact of a higher sales tax.
Elsewhere, NZD/JPY inched down 0.04% to 78.20 after Statistics New Zealand said that retail sales rose 1.7% last month after a June increase of 0.5%. Analysts expected a 1.3% July increase. Core sales climbed 2.3% compared with a 0.6% June rise. Analysts expected core sales to rise 1.3%.
AUD/JPY fell 0.28% to 89.22 after the Australian Bureau of Statistics said its wage price index remained unchanged at a seasonally adjusted 0.7% in the second-quarter. Analysts expected a second-quarter reading of 0.8%.
In Asian trading Wednesday, USD/JPY fell 0.18% to 98.04. The pair was likely to find support at 95.91, Monday’s low and resistance at 98.57, the high of August 6.
The greenback gained some steam against the yen Tuesday after after reports that Prime Minister Abe is looking at lowering the corporate tax rate as a way to offset a planned increase in sales tax.
Meanwhile, Japan's core machinery orders fell 2.7% in June from the previous month, government data showed Tuesday, less than expectations for a decline of 7.2%.
While a lower corporate tax would benefit already high-flying Japanese equities, the specter of a higher sales tax is what many market participants are focused with debate swirling around whether or not the Japanese economy is strong enough to absorb tax increases of any kind.
A higher tax burden could also dash Abe’s hopes of increasing domestic, part of the so-called third pillar of Abenomics, the prime minister’s economic revitalization efforts. Abe has requested his financial ministers further study the impact of a higher sales tax.
Elsewhere, NZD/JPY inched down 0.04% to 78.20 after Statistics New Zealand said that retail sales rose 1.7% last month after a June increase of 0.5%. Analysts expected a 1.3% July increase. Core sales climbed 2.3% compared with a 0.6% June rise. Analysts expected core sales to rise 1.3%.
AUD/JPY fell 0.28% to 89.22 after the Australian Bureau of Statistics said its wage price index remained unchanged at a seasonally adjusted 0.7% in the second-quarter. Analysts expected a second-quarter reading of 0.8%.