Is Japan under risk of recession?

Once again industrial production in Japan disappointed in August. Production fell by 0.5% mom. Analysts had expected a rise of 1%. Similarly, last night, the country's retail sales remained below expectations .

However, weak macro data long since stopped being a reason for the JPY to come under pressure, notes Commerzbank. It continues to react mainly to changes in risk perception. 

At the same time data such as that published last night does create increasing pressure, as there is a risk of Japan sliding back into recession for the second time within Prime Minister Shinzo Abe'e time in office. As it increasingly looks as if abenomics will fail the pressure on the government to spend even more money is mounting. And of course politicians will make increasing demands of the Bank of Japan. 

However, the latter has hardly any options left for making its monetary policy any more expansionary. Should it become clear at some stage that there are no options left for Japanese officials to act weak macro data will probably stop being like water off the JPY's back.