When is Japan's GDP, and how could it affect the USD/JPY?
|Japan GDP overview
Late Thursday sees Japan's latest quarterly GDP dropping at 23:50 GMT, just before the Friday rollover, and 2018's Q2 is expected to see Annualized GDP kick up to 1.4% versus the previous period's -0.6%, while the q/q GDP is expected to come in at 0.3% (last -0.2%), not necessarily a strong reading, but any inflation is seen as good inflation for Japan's still-lagging economy, which has stagnated for decades. The Bank of Japan (BoJ), desperate to spur growth in Japan's domestic economy, has been chasing a hyper-easy policy strategy for several years, and the central bank is hungry for any sign that their overbearing fiscal strategy is finally beginning to work in a meaningful way.
How could it affect the USD/JPY?
With the Japanese Yen playing host as the broader market's preferred safe-haven currency, a thoroughly bullish reading for the Japanese GDP could see the Yen take a hit as market participants drop the Yen in favour of picking up riskier assets, while a missed reading will see Asia session traders piling back into risk-off flows straight into the JPY, buoying Japan's currency in a counter-intuitive market play.
The Greenback caught some lift in Thursday's action, and is now hanging near the 111.00 figure while Asia session markets await Japan's GDP figures to pick a direction, as noted by FXStreet's own Valeria Bednarik: "the pair trades around the 111.00 figure, and the 4 hours chart shows that the 100 SMA continues heading south above the current level and above the 200 SMA, indicating an increasing downward potential without confirming it. Technical indicators in the mentioned chart have recovered from their daily lows, but are unable to define a direction, hovering right below their midlines. US inflation could be a make it or break it for bears, who can't seem to be able to fully take over the pair."
Support levels: 110.55 110.20 109.80
Resistance levels: 111.20 111.60 111.90
Key notes
USD/JPY analysis: steady around 111.00 ahead of Japanese Q2 GDP
About the Japan GDP
The Gross Domestic Product released by the Cabinet Office shows the monetary value of all the goods, services and structures produced in Japan within a given period of time. GDP is a gross measure of market activity because it indicates the pace at which the Japanese economy is growing or decreasing. A high reading or a better than expected number is seen as positive for the JPY, while a low reading is negative.
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