The Japanese Yen’s Depreciation and Japan’s Economic Slowdown
- Reasons for the Yen’s Depreciation:
- Slowdown in domestic economic activities
- Japan’s Q3 GDP Growth:
- 0.9% annualized growth, down from 2.2% in Q2
- Kato’s Response:
- Commitment to addressing foreign exchange rate fluctuations
The Japanese Yen (JPY) has been on a losing streak against the US Dollar (USD) for the fifth consecutive session, driven by Japan’s Q3 Gross Domestic Product (GDP) data. The USD’s strength and anticipation of the US October Retail Sales release further support the USD/JPY pair’s upward momentum.
Japan’s Economic Outlook
Japan’s Q3 GDP growth showed a slowdown, with Finance Minister Katsunobu Kato pledging to take action against excessive FX rate fluctuations. Economy Minister Ryosei Akazawa expects a modest recovery but highlights the need for vigilance against global risks and market volatility.
US Dollar’s Strength and Market Performance
- US Dollar Index (DXY):
- Hovers around 107.06, reaching its highest level since November 2023
- Fed’s Assessment:
- Positive remarks from Fed Chair Jerome Powell and Richmond Fed President Thomas Barkin
- US Producer Price Index (PPI):
- Rose by 2.4% YoY in October, exceeding market expectations
Technical Analysis: USD/JPY Performance
USD/JPY trades near 156.50, displaying a bullish bias on the daily chart. The pair could target the upper channel boundary at 159.70, with potential support at 154.65 and 153.90.
Market Insights and Economic Indicators
- BoJ’s Outlook:
- Deputy Governor Shinichi Uchida’s caution on financial sector preparedness
- Japan’s and US Price Index Data:
- Japan’s PPI exceeded expectations, while the US CPI met forecasts
Japanese Yen PRICE Today
The table below shows the percentage change of Japanese Yen (JPY) against major currencies. Notably, JPY weakened against the New Zealand Dollar.
Gross Domestic Product Annualized Indicator
The Gross Domestic Product (GDP) reflects Japan’s economic activity, with Q3 data showing a 0.9% growth rate. Higher GDP readings are considered bullish for the Japanese Yen, influencing market sentiment.