Japanese Yen Unimpressed Despite Better-Than-Expected GDP
- The Japanese Yen was unimpressed by better-than-expected GDP results
- Japan’s economy grew 2.2 percent annualized versus 1.7% percent expected
- The timid reaction was likely due to the data’s implication for BoJ policy bets
What do retail traders’ buy/sell decisions hint about the Japanese Yen trend?Find out here.
The Japanese Yen showed a lackluster response against its major counterparts after preliminary first quarter GDP figures crossed the wires. Japan’s economy grew 2.2 percent compared to the same period the year before versus 1.7 percent expected. Relative to the prior quarter, the nation’s output gained 0.5% as expected. The nominal reading fell short of estimates coming in at 0.0% q/q against 0.1% forecasted.
Private consumption increased 0.4%, slower than the 0.5% growth expected. Business spending was up 0.2% on the quarter, better than the 0.4% contraction estimated.
Net exports, which is the difference between a country’s exports and imports, added 0.1 percentage points to q/q GDP. However, the details of the report revealed that export growth slowed down falling to +8.9% from +14.1% in the fourth quarter. Private inventory also added 0.1 percentage points to q/q GDP.
The market’s muted response to the data, even though it was higher than the Bank of Japan’s 2017-18 growth projections, is a telling sign of its relevance. This is likely because of its minimal impact for BoJ monetary policy expectations. The central bank is focused on bolstering inflation. The next CPI report will be released next week.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.