Canadian dollar was lower Monday while the greenback gained strength in the wake of data showing Japan has fallen back into recession.
The loonie was down 0.22 of a cent to 88.46 cents US as the world’s third-largest economy contracted at a 1.6 per cent annual pace as housing and business investment dropped following a sales tax hike.
Japan emerged from its last recession just as Prime Minister Shinzo Abe took office in December 2012, saying he would end two decades of stagnation with a combination of lax monetary policy, strong fiscal spending and “drastic” economic reforms — a strategy dubbed “Abenomics.”
But consumer spending is faltering as the population shrinks and grows older. Japanese manufacturers have lost their leading edge in innovation while shifting production to cheaper locations offshore.
Energy is also a major focus for the commodity-sensitive Canadian dollar this week after concerns about demand and global oversupply pushed crude to below US$75 for the first time in four years. On Monday, the December contract in New York was down 82 cents to US$75 US.