USDJPY intends to keep its positive momentum due to the USD weakness.
The Japanese Yen is strengthening against the USD despite some weak statistics. The current quote for the instrument is 109.19.
The numbers published in the morning showed that the Japanese GDP, according to the preliminary data, was -1.3% q/q in the first quarter of 2021 after being 2.8% q/q the quarter before and against the expected reading of -1.2% q/q. On YoY, it’s much worse – the indicator was -5.1% against the expected reading of -4.6%.
However, one should remember that early in the year the Japanese government declared a state of emergency for the entire 1st quarter, that’s why the country’s population was rather restricted in visiting restaurants and cafes in the evenings and leaving prefectures. To prevent the spread of disease, people were recommended to work from home and avoid unnecessary contacts. Taken together, these measures significantly decreased consumer spending, which already was rather restrained.
Apart from social restrictions, a reduction in spending was also caused by lower perks paid in winter, which turned out to be the smallest since 2009.
The components of the report show that the Private Consumption was -1.4% q/q, while spending in cafes and restaurants dropped 2.6%. q/q. Household spending on durable goods lost 3.0%.
As a rule, the Yen barely responds to the statistics but the GDP report is one of the few that may force it to reach in some way. So far, the weakness of the American currency is more important for market players than disappointing Japanese statistics.
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.