Global macro overview for 15/02/2016:
The gross domestic product figures were delivered from Japan overnight. They were worse than anticipated. The forecast was around -0.3% q/q, but the indicator fell by 0.4% q/q. This reading was even lower than the previous GDP figures (0.3%) despite of more than three years of Abenomics programme aimed at improving the world's third biggest economy. The main drivers for this contraction was a decrease in consumer spending, weak domestic demand, and weal exports to emerging markets. It looks like Abe's stimulus programme has failed to encourage households to spend and the latest BoJ negative interest rate decision are almost desperate measures to stimulate the economy as volatile financial markets threatened its efforts to overcome deflation.
Let's take a look at the technical picture on the USD/JPY pair after the data was published. The price is trying to bounce from the support level of 110.98 in the daily chart and might even head higher towards the level of 115.95. As long as this level is not violated with a daily candle close above 116.00, the daily downtrend is still in play. Bears will remain in control until this level broken amid the temporary bullish reversal.