Talking Points
- Japanese Yen little changed after worse than expected GDP data
- Annualized 2Q GDP growth rate 0.2% vs. 0.7% expected, 2% in 1Q
- On-coming fiscal stimulus plan likely at center stage in the near term
The USD/JPY was little changed after worse than expected second-quarter GDP figures crossed the wires, hinting that the government’s promised stimulus plan is at center stage in the near term.
The annualized GDP came in at 0.2 percent versus the 0.7 percent expected and the 2.0 percent recorded previously, while nominal GDP was in-line with expectations at 0.2 percent versus the 0.8 percent recorded previously.
With the Prime Minister Shinzo Abe announcing plans for a new round of stimulus last month, the market may not be as concerned with near term economic figures. Meanwhile, the DailyFX Speculative Sentiment Index shows retail traders are net long by a factor of over 4 to 1. The SSI is typically a contrarian indicator, meaning this hints at USD/JPY weakness.
