The Yen remains under pressure. Overview for 17.02.2020

17.02.2020

On Monday, USDJPY is growing a little bit; the Japanese currency is responding to the weak numbers on the country’s GDP.

The Yen remains weak against the USD early in another February week. The current quote for the instrument is 109.83. 

In the morning, investors focused their attention on the statistics from Japan. The preliminary report on the country’s GDP in the fourth quarter of 2019 showed -1.6% q/q after being +0.4% q/q the quarter before. Market expectations were -1.0% q/q. On YoY, the indicator lost 6.3% against the expected reading of -3.7%. 

The components of the report show that the private demand and the private consumption both lost 2.9%, the public demand slowed by 0.4%, the capital expenditure dropped 0.6%, and the exports of goods and services dropped 0.1% along with the imports (-2.6%)

At the same time, the government spending grew by 0.2% and the net external demand added 0.5%. However, these positive readings were not enough to cover the negative ones. 

This data might be a signal for the Bank of Japan that the current QE program is no longer working as it should. The regulator must either revise the entire program or expand the volume. However, the Bank of Japan doesn’t seem to be prepared for any of these steps. 
 

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.