- Japanese Yen (JPY) falls, giving back yesterday’s gains
- Japanese GDP was 3.1% annualized in Q2
- US Dollar (USD) fall versus its major peers
- The US Jackson Hole Symposium is next week
The US Dollar Japanese Yen (USD/JPY) exchange rate is falling on Friday, snapping a 2-day rising run. The pair rose 1.33% in the previous session, settling on Thursday at 149.27. At 14:00 UTC, USD/JPY trades -1% at 147.72 and is in a range of 147.62 to 149.28. The pair is on track to rise this week after a flat performance the previous week.
The yen is set to lose around 1% this week, marking its largest weekly decline in almost two months.
The yen quickly shrugged off yesterday’s data showing that the Japanese economy bounced back, expanding at a much faster pace than expected in the second quarter. GDP rose at an annualised pace of 3.1% in Q2 after a slump at the start of the year, thanks to a rise in consumption.
Stronger economic growth supports the case for another interest rate hike. The Bank of Japan said that strong economic growth could help support the case for further hikes as it will help inflation remain sustainably around the 2% target.
The yen is struggling to hold on to gains from earlier in the month when the currency surged to 141.67 on August 5th after a surprise hike from the BoJ and after a flare-up in US recession worries.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 102.68 at the time of writing, down 0.34%, after gains in the previous day.
The US dollar is falling against its major peers, regaining yesterday’s gains. It is on track to fall throughout the week, marking the fourth straight weekly decline.
Data this week has helped calm US recession fears; however, the market is still very much expecting the Federal Reserve to start cutting interest rates next month. The base case scenario is for a 25 basis point rate cut.
Today, attention will be on the Michigan consumer sentiment index, which is expected to edge modestly higher to 66.9 in August from 66.4.
Federal Reserve chair Jerome Powell will speak next week at the Jackson Hole Symposium.
