Japan economy rebounded in the first quarter of 2016 and Prime Minister Shinzo Abe should consider this before deciding fiscal stimulus that Japan needs related to tax rise.
First quarter GDP expanded 1.7% from the fourth quarter of 2015 which contracted -1.7%, while economists expected 0.3% expansion.
The GDP data was released after series of weak data at the previous month, including the 4th quarter contraction, triggered expectation that Prime Minister Shinzo Abe will lauch fiscal stimulus and postpone the tax rise to 2017. The tax rise at 2014 was blamed as the cause of resession, but the prime minister said that the next tax plan is still on schedule unless if another shock hit the economy.
USD/JPY is testing the Fibonacci support area at 109.190-108.909. Note that hourly stochastic and CCI are overbought, so there could be another correction to within the support area. Wait for bullish signal confirmation on a pull-back move to within the support area as signal to go long with 109.363 as target and 109.644 in extension.
Be careful if the support at 108.909 breaks because it will turn the intraday bias to bearish and possibly will push USD/JPY to 108.709-108.455.