- The Japanese Yen (JPY) is holding steady after losses yesterday
- Japanese GDP rose 0.1% QoQ, missing forecasts
- The US Dollar (USD) rises against major peers
- USD rises on safe haven flows & ahead of key data
The US dollar Japanese yen (USD/JPY) exchange rate is holding steady after gains yesterday. The pair rose 0.53% in the previous session, settling on Monday at 153.51. On Tuesday at 19:00 UTC, USD/JPY trades -0.03% at 153.47 and trades in a range of 152.70 to 153.90.
The Japanese yen weakened sharply yesterday and is holding on to those losses today, ending a five-day winning streak triggered by Prime Minister Takaichi’s landslide victory in a catechism.
However, data released yesterday showed that Japanese economic growth in the fourth quarter fell short of expectations, raising questions about another BoJ rate hike soon.
GDP in Japan grew just 0.1% in the fourth quarter of 2025, narrowly avoiding a technical recession.
While this was a reversal of 0.7% contraction in Q3, it missed expectations of 0.4% growth.
The Bank of Japan raised its economic growth forecast for the fiscal year ending March 2026 to 0.9% and its fiscal 2026 outlook to 1% from 0.7%.
Japanese CPI data is due later this week.
The U.S. dollar is unchanged against the yen but rising against major peers. The US dollar index, which measures the USD against a basket of currencies, is rising 0.37% on Tuesday to 97.27.
The US dollar is rising against its major pairs amid rising geopolitical tensions, creating greater uncertainty and risk for investors.
While the US and Iran reached an understanding on guiding principles in a second round of indirect talks over the long-standing nuclear dispute, a deal is not expected to be imminent.
The US has sent an armada to the Middle East to pressure Tehran to end the decade-long dispute. President Trump has said that regime change could be the best outcome.
Investors were also waiting for minutes from the Federal Reserve’s February interest rate meeting, as well as key economic data this week, including the core PCE, the Fed’s preferred inflation gauge. GDP data.