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JPY Daily News
Japanese Q2 GDP Disappoints
Japanese economic data started this week's trading on a down note. Yesterday Japan released disappointing Q2 GDP to the tune of 0.1%. Economists had expected the Japanese economy to expand by 0.6%. The stagnant growth increases concerns over the pace of the global economic recovery.
Following the release of poor data, the yen strengthened on safe-haven buying. The USD/JPY fell as low as 85.20 before ending the day at 85.30. The pair was held above the support level of 85 on speculation that the Bank of Japan will intervene and begin selling yen in order to weaken the nation's currency. The Japanese economy is dependent on its exports to fuel economic growth. A strong yen makes Japanese exports less competitive overseas.
More gains for the yen may be in store today should U.S. building permits be released to weaker than expected data. This could cause a similar run to safe haven assets and add further doubts as to the recovery of the global economy. Support and resistance for the USD/JPY rest at 86.30 and 85.00.
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