USD/JPY retreats to 147.50 as markets digest PM Ishiba's resignation
- The Yen retraced earlier losses and trades higher against a vulnerable US Dollar.
- Japanese PM Ishiba rattled markets by announcing his resignation on Monday.
- Ishiba's resignation shadowed the impact of a bright Japanese GDP report.
US Dollar’s upside attempts against the Japanese Yen have been capped right below 148.60, and the pair retreated to session lows at 147.50 as the Yen regained lost ground following Japanese Prime Minister Ishiba’s resignation.
Ishiba announced earlier on the day of his decision to step down, following the defeat in July’s elections. Ishiba´s resignation sent Japanese long-term yields higher and hammered the Yen, but the JPY has regained lost ground during the European session.
Japan's Q2 GDP growth beats expectations
Concerns about the political situation have shadowed the strong Japanese Gross Domestic Product figures seen in the Early Asian session, which provide further reasons for the Bank of Japan to hike interest rates at next week’s meeting.
Japanese economy grew at a 0.5% pace in the second quarter, and at a 2.2% annualized pace according to the latest GPO report. These figures beat expectations of 0.3% and 1% respectively, forecast by market analysts.
The US Dollar, on the other hand, remains vulnerable after Friday’s poor US Nonfarm Payrolls report. A weaker-than-expected job creation in August, coupled with a net employment loss in June and the increase in the Unemployment Rate, has paved the path for a Fed rate cut next week.
Economic Indicator
Gross Domestic Product (QoQ)
The Gross Domestic Product (GDP), released by Japan’s Cabinet Office on a quarterly basis, is a measure of the total value of all goods and services produced in Japan during a given period. The GDP is considered as the main measure of Japan’s economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Sun Sep 07, 2025 23:50
Frequency: Quarterly
Actual: 0.5%
Consensus: 0.3%
Previous: 0.3%
Source: Japanese Cabinet Office
Economic Indicator
Gross Domestic Product Annualized
The Gross Domestic Product (GDP), released by Japan’s Cabinet Office on a quarterly basis, is a measure of the total value of all goods and services produced in Japan during a given period. The GDP is considered as the main measure of Japan’s economic activity. The data is expressed at an annualized rate, which means that the rate has been adjusted to reflect the amount GDP would have changed over a year’s time, had it continued to grow at that specific rate. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Sun Sep 07, 2025 23:50
Frequency: Quarterly
Actual: 2.2%
Consensus: 1%
Previous: 1%
Source: Japanese Cabinet Office
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
