Japan’s Finance Ministry is up for releasing the first version of the third quarter (Q2) Gross Domestic Product (GDP) figures for 2022 at 23:50 GMT on Monday, early Tuesday morning in Asia.
Market consensus bears the burden of the global supply chain blockade, mainly due to the Russia-Ukraine tussle, which in turn weighs on the GDP forecasts suggesting a 0.30% QoQ figure versus 0.9% prior. The details mention that the Annualized GDP is expected to have eased by 1.1% from 3.5% in previous readings.
Considering the Bank of Japan’s (BOJ) defense of the easy money policies, today’s Japanese GDP data appears to be the key to the USDJPY pair buyers, mainly due to the latest rebound.
Ahead of the event, Westpac mentioned,
Despite the ongoing rebound in consumption, materially weaker trade will likely see GDP growth slow notably in Q3 (market forecast: 0.3% QoQ).
How could it affect USD/JPY?
Considering the risks to Asia’s major economy highlighted by the BOJ policymakers in the latest meeting, any further weakness in the GDP figures will push the Japanese central bank towards further easing. However, the policymakers already conveyed their easy-money policy when the major central banks were rushing towards higher rates. Hence, today’s Japanese GDP numbers, even if provide a positive surprise, might not be able to renew the Japanese Yen’s (JPY) strength unless being extremely high.
Technically, the USDJPY pair’s daily closing below the 100-DMA support, now immediate resistance around 140.85, keeps the pair directed towards an upward-sloping support line from late May, close to 136.80 at the latest.
Key Notes
USDJPY reclaims 140.00, after dropping to multi-month lows at around 138.00s
About the Japanese Q3 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. 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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD retargets the 0.6600 barrier and above
AUD/USD extended its positive streak for the sixth session in a row at the beginning of the week, managing to retest the transitory 100-day SMA near 0.6580 on the back of the solid performance of the commodity complex.
EUR/USD keeps the bullish bias above 1.0700
EUR/USD rapidly set aside Friday’s decline and regained strong upside traction in response to the marked retracement in the Greenback following the still-unconfirmed FX intervention by the Japanese MoF.
Gold advances for a third consecutive day
Gold fluctuates in a relatively tight channel above $2,330 on Monday. The benchmark 10-year US Treasury bond yield corrects lower and helps XAU/USD limit its losses ahead of this week's key Fed policy meeting.
Bitcoin price dips to $62K range despite growing international BTC validation via spot ETFs
Bitcoin (BTC) price closed down for four weeks in a row, based on the weekly chart, and could be on track for another red candle this week. The last time it did this was in the middle of the bear market when it fell by 42% within a span of nine weeks.
Japan intervention: Will it work?
Dear Japan Intervenes in the Yen for the first time since November 2022 Will it work? Have we seen a top in USDJPY? Let's go through the charts.