USD/JPY – Rangebound Ahead of Japanese GDP

The Japanese yen is flat on Tuesday, as the pair trades slightly above the 102 line late in the European session. In economic news, today's US highlight is JOLTS Job Openings, with the markets expecting a strong reading. In Japan, Revised Industrial Production posted a sharp decline of 3.4%, well short of expectations. Later in the day, we'll get a look at GDP, one of the most important economic indicators, as well as the minutes of the last BOJ policy meeting.

Is the Japanese manufacturing sector in trouble? Japanese manufacturing indicators continue to post declines this week. Tertiary Industry Activity came in at -0.1%, short of the estimate of a 0.2% gain. Revised Industrial Production dropped 3.4% last month, its steepest fall since October 2012. Meanwhile, markets eyes on Japanese GDP, which will be released later on Tuesday. The markets are braced for a decline of 1.7%, in Q2, which would mark the first drop in economic activity since Q4 of 2012. Traders should be prepared for the yen to lose ground if GDP posts a weak reading.

In the US, employment indicators are under the market microscope, as the strength of the labor market is one of the most important factors influencing the Federal Reserve regarding the timing of an interest rate hike. A rate hike is expected by mid-2015, but stronger economic data, especially on the employment front, could hasten a rate move. We'll get a look at JOLTS Jobs Openings later on Tuesday. The indicator has been on an upswing and exceeded the estimate in the past two releases. Another rise is expected in the July release, with the estimate standing at 4.74 million.

USD/JPY 102.17 H: 102.28 L: 102.14