USDJPY Strengthens As US July Retail Sales Rebounds More Than Forecast
THE TAKEAWAY: [US retail sales rebound in July; largest gain since February] > [Possible rebound in economic growth in coming months] > [USDJPY bullish]
U.S. retail sales jumped more than expected in July after declining for three straight months, signaling a possible rebound for the economy in coming months. The Commerce Department released a report today that showed that retail sales rose 0.8 percent in July, the largest gain since February, after contracting 0.7 percent the previous month. The median forecast of 85 economists surveyed by Bloomberg News had projected a 0.3 percent increase in July.
The boost in consumer spending was broad-based, with retail sales less autos rising 0.8 percent, and sales excluding auto and gas climbing 0.9 percent in July. The positive data suggests that the slowdown in economic growth during the second quarter could be temporary, with stronger consumption likely to provide some optimism for third quarter growth.
USDJPY 1-minute Chart: August 14, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
In the minutes following data release, the U.S. dollar surged against the Japanese yen on the stronger-than-expected sales figures. Within the first 15 minutes, the USDJPY had jumped as much as 25 pips to trade around 78.88 yen to the dollar.
--- Written by Tzu-Wen Chen, DailyFX Research