- The Japanese Yen (JPY) gains after losses last week
- The yen rises after stronger GDP data
- The US Dollar (USD) is flat versus major peers
- USD sees low volumes on President’s Day holiday
The US dollar Japanese yen (USD/JPY) exchange rate is falling after gains last week. The pair rose 0.61% in the previous week, settling on Friday at 152.33. At 21:30 UTC, USD/JPY trades -0.54% lower at 151.40 and is in a range of 151.34 to 152.38.
Leanne is rising on Monday after getting a boost from upbeat Japanese growth data. Figures show that the Japanese economy grew by not .7% quarter on quarter in the final quarter of last year, well ahead of the 0.3% growth that analysts had forecast.
The strong growth came from improved business spending and a surprise increase in consumption, which fueled expectations that the Bank of Japan would hike interest rates again in May, especially if there were another year of bumper spring wage negotiations.
Markets are now pricing in another 37 basis points worth of rate increases by the end of the year.
The US Dollar is falling against the yen but is unchanged against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is +0.01% to 106.73 at the time of writing, a two-month low.
The US dollar was struggling after steep losses last week after Friday’s US retail sales data worried investors and as investors cheered the delay in the implementation of Trump’s reciprocal tariffs.
On Friday, data showed that US retail sales contracted by -0.9% month on month, the first monthly decline since June last year. This was well below the forecast -0.1% decline.
Meanwhile, trading volumes were light on Monday due to the President’s Day public holiday.
Looking out across the week, the key focus for the market will be the FOMC minutes from the January meeting, which will be released on Wednesday. Plenty of Fed officials are also scheduled to speak. The market will be watching for clues about the Fed’s outlook for interest rates, particularly given the weaker consumer.