The Japanese economy grew by 0.5 percent in the three months to September, with GDP at 2.0 percent, showing a seventh straight quarter of positive growth, according to the Japanese Cabinet Office, beating market expectation of just 1.2%. This supports the view of a further strengthening in Japanese stock and housing markets.

The strength is expected to further increase pressure on Japanese interest rates and contributed to last weeks plunging dollar, within a larger bear trend as the US interest rates expectations of cuts on the back of the housing slump and slowing economic activity diverges from Japanese expectations for rises in light of stronger growth.

Though both Japan and China, despite recent talk of diversifying away from the dollar, are likely to continue to support the dollar in light of their export driven economies and suggests a more orderly and shallow downtrend rather than a sharp panic driven declines.

The other beneficiary of a declining dollar and strengthening Japanese economy are commodities such as gold and crude oil is also expected to benefit. due to the dual effects of increased demand with the inflationary effect of a decline in the dollar as crude and many commodities are priced in US dollars.

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