Japanese data today disappointed, with Q4 GDP falling to 0.5% q/q growth in they seasonally adjusted figure. The Japan’s Q4 GDP grew 0.5% in Q4’s (q/q, saar) preliminary reading after a revised 2.2% gain in Q3 (was +2.5%). This was a disappointing report, with growth slowing in Q4 by a much larger degree than anticipated. Of course, Japan’s GDP has improved for eight consecutive quarters, which is broadly constructive. But Japan’s economy is a long way from self sustaining growth, consistent with ongoing steady policy from the BoJ.
Despite the disappointing GDP figure, USDJPY is down for a fifth straight session, logging a low earlier in Tokyo trading at 106.84, which is the lowest level seen since November 2016. The breach of 107.00 is reportedly significant, being a massive option level. Yen crosses are mostly lower, too, albeit by comparatively moderately degrees. EURJPY ebbed to a three-session low of 132.36, and AUDJPY also forayed into three-session low terrain. This comes amid a backdrop of mixed equity markets in Asia, where Japanese markets have continued to decline, with the Nikkei 225 closing with a 0.5% loss, contrasting to the 1%-plus gains that the main indexes in South Korea and Hong Kong have seen, while, in the case for USDJPY, there are market narratives pointing to the release of U.S. CPI data later today as likely to evidence still-lacklustre price pressures (given this sentiment, any unexpected acceleration would likely be an explosive dollar buying cue).
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