Japan's gross domestic product, GDP, fell larger than expected:

JPY GDP ANNUALIZED 1ST QUARTER -3.7% ACTUAL vs. -1.9% FORECAST vs. -3.0% PREVIOUS

JPY GDP Q/Q 1ST QUARTER                -0.9% ACTUAL vs. -0.5% FORECAST vs. -0.8% PREVIOUS

This is Japan's second straight contraction sending the country into their 3rd recession in a decade.  Both the earthquake and tsunami on March 11th dampened production and forced consumers to scale back spending.   

According to Kaoru Yosano, Japan's economy minister, the economic downturn is a temporary phenomenon.  He told a news conference, Japan's economy is expected to remain weak for the time being.  But the economy has the strength to bounce back 

YEN IMPLICATIONS: The following chart will show that YEN looks poised to gain against the USD.

 width=630

SOURCE: FXCM

In this daily USDJPY chart, we can see price move higher and hit the trend line.  A move to 83.92 and concurring price stability at that level would form a head and shoulder pattern.  A few things to be careful with is today's price action hit the 100 daily simple moving average (82.237) and fell back down.  Also, tonight we have the BOJ interest rate decision; however any YEN strength and I would be ready to buy USDJPY.