The USD/JPY pair is falling slowly on Thursday as investors are analyzing the Japanese GDP report.
On Thursday morning, the Japanese yen is growing against the USD. The current quote for the instrument is 109.65.
Today’s statistics showed that the Japanese GDP expanded by 0.3% q/q (+1.0% y/y) in the first quarter of 2017. These readings are much weaker than expectations, especially on YoY, which was expected to add 2.4%.
The Nominal GDP of the country in the first quarter was -0.3%, although at the first reading it was zero. The GDP deflator over the same period lost 0.8%, just as expected. Considering the weakness of the latest reports, the Japanese GDP has been in a positive way for five quarter in a row, something that hasn’t happened over the last 3 years.
Improvements of the Capital Expenditure (+0.6% q/q) couldn’t “compensate” the weak reading of the Private Consumption (+0.3% q/q). Due to the GDP parameters, activities on the market remain very low and the growth rate is not significant.
In the days ahead, the demand for the Japanese Yen may decrease, but everything depends on the USD/JPY pair behavior after the June meeting of the ECB. Earlier, the market was too optimistic to buy the EUR/USD pair in anticipation that this time the European regulator would provide some hints at faster refusal of the QE program. However, the ECB didn’t add any support to this rumor and became less active in the main currency pair before the meeting by refusing to buy the Euro in favor of the USD. If the sales of the EUR/USD pair increase later in the afternoon, the Yen will weaken as well. Then again, it may be just local fluctuations.
RoboForex Analytical Department