17 Aug 2015
USD/JPY: Yen bulls take a back seat as Japan Q2 GDP contracts
FXStreet (Mumbai) - The US dollar regained lost footing against the Japanese yen in early trades, sending USD/JPY to fresh highs near 124.50 levels, as the JPY bulls took a back seat following the release of disappointing Japan’s preliminary figures for the second quarter which showed that that the economy contracted due to softer private demand, underscoring expectations of further policy support.
USD/JPY rises from 124.30 levels
Currently, the USD/JPY pair trades 0.10% higher near fresh session highs printed at 124.45, extending the bounce to reclaim 124.50 levels. The major attempts a bounce higher on the 124 handle as the USD bulls jumped back into bids after the yen was hit by poor Japan’s economic data which revealed that output from the world's third-largest economy shrank for the first time since 2014 Q4, owing to weak exports and soft private demand, putting greater pressure on policymakers for further easing its monetary policy.
GDP growth fell 0.4% in the June quarter, the first estimate from Japan's Cabinet Office showed on Monday, coming in slightly stronger than the market forecast of a 0.5% contraction, but turning around sharply from the first-quarter expansion of 1.0%.
Moreover, the traders also continue to favour the US currency against the yen amid divergent monetary policy outlooks between both the continents as Fed remains on track to raise its interest rates as early as next month backed by the recent streak of upbeat US fundamentals.
Meanwhile, markets now await the China Yuan fix amid a data quiet trading calendar in the day ahead with only the 2nd tier data in NAHB Housing market index to be reported in the US session.
USD/JPY Technical Levels
To the upside, the next resistance is located 124.80 (Aug 10 High) levels and above which it could extend gains 125.08 (Aug 7 High) levels. To the downside immediate support might be located at 124.07 (Aug 13 Low) below that at 123.77 (Aug 12 Low) levels.
USD/JPY rises from 124.30 levels
Currently, the USD/JPY pair trades 0.10% higher near fresh session highs printed at 124.45, extending the bounce to reclaim 124.50 levels. The major attempts a bounce higher on the 124 handle as the USD bulls jumped back into bids after the yen was hit by poor Japan’s economic data which revealed that output from the world's third-largest economy shrank for the first time since 2014 Q4, owing to weak exports and soft private demand, putting greater pressure on policymakers for further easing its monetary policy.
GDP growth fell 0.4% in the June quarter, the first estimate from Japan's Cabinet Office showed on Monday, coming in slightly stronger than the market forecast of a 0.5% contraction, but turning around sharply from the first-quarter expansion of 1.0%.
Moreover, the traders also continue to favour the US currency against the yen amid divergent monetary policy outlooks between both the continents as Fed remains on track to raise its interest rates as early as next month backed by the recent streak of upbeat US fundamentals.
Meanwhile, markets now await the China Yuan fix amid a data quiet trading calendar in the day ahead with only the 2nd tier data in NAHB Housing market index to be reported in the US session.
USD/JPY Technical Levels
To the upside, the next resistance is located 124.80 (Aug 10 High) levels and above which it could extend gains 125.08 (Aug 7 High) levels. To the downside immediate support might be located at 124.07 (Aug 13 Low) below that at 123.77 (Aug 12 Low) levels.