The Japanese yen has posted losses on Tuesday as USD/JPY trades in the mid-118 range on Tuesday. It’s a quiet day on the release front, with NAHB Housing Market Index the sole indicator on the calendar. There are no Japanese releases on Tuesday, but the BOJ will release its monthly policy statement early on Wednesday. In China, GDP remained steady at 7.3% in Q4.
USD/JPY moved higher on Tuesday, as Chinese GDP came in at 7.3% for Q4, edging above the estimate of 7.2%. This eased worries about a slowdown in China, the world’s second largest economy, as GDP kept up with its pace in Q3. The yen was trading below the 116 line last week, but has taken a beating since then, surrendering about 250 points.
It has been less than a week since the SNB stunned the markets by suddenly removing its cap with the euro. However, the markets have had to quickly change focus, as there is growing anticipation that the ECB will announce a QE package on Thursday, when the ECB meets for a crucial policy meeting. The Eurozone has been plagued by deflation and weak growth, and the SNB shocker only reinforces the belief that the ECB will finally make a move. Even if QE has been priced in, there’s no way to know the size of such a scheme, so traders could be in for further volatility in the currency and commodity markets later in the week.
USD/JPY 118.54 H: 118.77 L: 117.70
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