The Japanese yen has edged lower on Monday. In the European session, USD/JPY is trading at 150.42, up 0.26% on the day.
Japan’s GDP revised upwards in Q3
Japan’s economy expanded in the third quarter by 0.3% q/q, according to the final estimate. This edged above the initial estimate and the market estimate of 0.2%. The improvement was due to increases in capital investment and exports. However, consumption was revised downwards.
The Bank of Japan makes its rate announcement on Dec. 19 and today’s GDP data will be carefully scrutinized by Bank policymakers. The drop in consumption could be a concern for the central bank, which wants to see inflation driven by stronger demand. The meeting is live as it remains unclear whether the BoJ will press the rate-hike trigger or remain on the sidelines.
The BoJ tends not to be transparent about its rate path, one reason being that it wants to dissuade speculators from betting on the yen’s movement. Still, it’s clear that the BoJ is moving slowly towards normalization and another rate hike is very likely just a question of time. Governor Ueda has hinted a hike but a dovish member of the Bank, Toyoaki Nakamura, said on Thursday that consumption remains weak and the increase in wages may not be sustainable.
US Nonfarm Payrolls recover
US nonfarm payrolls bounced back in November with a gain of 227 thousand, above the market estimate of 200 thousand. This follows a weak October report, which was revised upwards to 36 thousand from 12 thousand. The unemployment rate ticked higher to 4.2% as expected, up from 4.1% in October.
The data has raised expectations of a quarter-pint hike at the Dec. 18 meeting, with the odds currently at 878%, up sharply from 62% a week ago.
USD/JPY technical
USD/JPY is testing support at 150.18. Below, there is support at 149.59.
There is resistance at 150.71 and 151.30.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD: Pressuring recent highs after soft US PPI figures
EUR/USD extends gains towards the 1.0300 region in the American session, helped by a better market mood. The United States Producer Price Index rose by less than anticipated in December, supporting the case of an on-hold Federal Reserve throughout the first half of the year.
GBP/USD weak below 1.2200 amid UK bond market concerns
GBP/USD retains its weak tone, trading sub-1.2200. The Pound Sterling lost ground amid another run in UK Gilt yields, reflecting the bond market instability. The US Dollar remains unattractive after December PPI figures.
Gold pressures intraday highs as mood sours
XAU/USD is finding a floor for now to bounce off after its sluggish Monday performance when Federal Reserve (Fed) policy rate concerns took over sentiment, recovering slightly and trading near $2,670 on Tuesday.
Bitcoin recovers after retesting $90K support
Bitcoin’s price recovers and trades at around $95,500 on Tuesday after dipping below $90,000 the previous day. The recent downturn at the start of the week has liquidated over $734 million in total liquidations, more than $152 million specifically in BTC.
Small business optimism shoots up in December
Small business sentiment continued to improve in December alongside greater economic and public policy certainty. The NFIB Small Business Optimism Index rose 3.4 points to 105.1, reaching its highest level since October 2018.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.