The Japanese yen left many currency experts wrong-footed on Monday with a seemingly unstoppable depreciation coming to an abrupt halt as the country received worse-than-expected growth data.
The dollar fell back from seven-year highs against the yen as Tokyo stock markets were sent tumbling. The greenback had seen an initial spike after the data release and moved close to 117 yen, but fell back to trade near 116 yen by 10 a.m. London time.
The shock growth data - which showed a contraction by an annualized 1.6 percent in the July-September quarter - was supposed to be a negative for the yen. The soft figures are likely postpone the implementation of another sales tax hike and could also force snap elections by the dovish Prime Minister Shinzo Abe, who would then gain a greater mandate to push through yet more stimulatory measures.