Japan GDP Trumps Estimates, USD/JPY Targets 99.44 if Support Broken
- Japan GDP 1Q P Surpasses Expectations at 1.5% vs 1.0% Expected
- Yen Rises Versus US Dollar Following Data Release
- Japanese Yen Remains a Sell Until this Changes
Japan’s economy reported a sharp rebound in growth in the first quarter as consumers reached into their wallets ahead of the sales tax increase on April 1st.
Japan GDP grew at a seasonally adjusted annual rate of 5.9 percent in the first quarter, trumping estimates calling for a print of 4.2 percent, and is a sharp rebound from 0.7 in the fourth quarter of 2013. The expansion on a quarterly basis also topped estimates at 1.5 percent versus 1.0 percent estimated. The expansion in the benchmark growth-rate was driven by consumer consumption.
On April 1st, Japan’s consumption tax was increased to 8 percent from 5 percent as an effort to improve the country’s fiscal position. The government has the option to raise taxes to 10 percent by 2015 if necessary.
The Japanese Yen Rose against the US Dollar following the data. USDJPY faces another test of support, with a break lower targeting 99.44, says DailyFX Strategist Jamie Saettele.
Chart Prepared by Jamie Saettele, CMT using FXCM Marketscope 2.0.
-- Written by David Maycotte, DailyFX Research Team. Questions, comments or concerns can be sent to firstname.lastname@example.org.
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