THE TAKEAWAY: Japan’s GDP numbers came in below expectations > Indicative of continual economic struggles, unlikely to change monetary policy > JPY Outlook Bearish
Japan’s GDP (4Q P) data release came in below expectations at -0.1% growth (QoQ) and -0.4% annualized growth versus estimates of 0.1% and 0.4% respectively. Meanwhile the GDP numbers were substantially better than prior rates of -1.0% (QoQ) and -3.8% (annualized). The Yen showed minimal movement following the data release, and was still positive against most majors on the day.
Although Japan’s GDP numbers came in below expectations, they are unlikely to have a significant impact on the market’s outlook regarding the Yen and appear only to confirm the status-quo. Rather it may take significant positive economic data in order to reverse the Yen’s deflationary trend. Given Forex trader’s current preference for investment currencies, and the aggressive monetary policy of Japanese policymakers, the Yen should face downward pressure in the long run.
USD/JPY (1 minute – 2 Hour Chart)
Chart Created usingMarket Scope– Prepared byJason Shemtob