Talking Points:

  • Japanese Yen declined despite annualized GDP growth at 2-year high
  • JPY appeared to have more interest in risk trends as Nikkei 225 fell
  • Confused about the Yen reaction? Ask a question during a Q&A webinar

The Japanese Yen struggled to capitalize on a very solid preliminary second quarter GDP report. Annualized growth came in at 4.0 percent versus 2.5 percent expected. This was the strongest increase since the first quarter of 2015, more than two years ago.

The rest of the data followed a similar pattern. Relative to the prior quarter, the nation’s output gained 1.0% versus 0.6% expected. Nominal GDP was 1.1% against 0.7% forecasted. Private consumption gained 0.9%, higher than the 0.5% growth forecasted.

Looking at Yen reaction more closely, the anti-risk currency actually depreciated in the aftermath of the GDP release. The Nikkei 225’s decline at the beginning of this week’s session might have played a role in that. As Currency Strategist James Stanley mentioned, the bigger push for JPY at this point seems to emanate from the larger overall global risk aversion theme.

Japanese Yen Declines Despite GDP Growth at Over 2-Year HighJapanese Yen Declines Despite GDP Growth at Over 2-Year High