Yen Strengthens After Japan's Record GDP Shrinkage
Ming Lam August 17, 2020 4:19 AM
Japan's economy shrank by the most on record in 2Q, with GDP plunging at an annualized rate of 27.8% on quarter...
Japan's economy shrank by the most on record in 2Q, with GDP plunging at an annualized rate of 27.8% on quarter (vs. -27.2% expected, -2.5% in 1Q). Note that the GDP has shrunk for three quarters in a row.
Japan's GDP Growth on Quarter (Annualized)
Sources: Trading Economics
Thanks to the coronavirus pandemic, Japan entered a state of emergency in April and May when tourism businesses and retailers shut down in face of minimal number of foreign visitors entering the country.
Meanwhile, the world's third-largest economy, which is exports-oriented, saw most of its foreign markets in lockdown during the pandemic.
The Bank of Japan, which is holding its key interest rates at negative territory for over four years, will not hold a monetary meeting until September 17.
On Monday, the Nikkei 225 Index slipped 192 points or 0.83% to 23096. Electronics and pharmaceutical stocks losing the most.
Meanwhile, the Japanese yen shows strength after the GDP release.
On an Intraday 30-minute Chart, USD/JPY keeps trading on the downside.
Source: GAIN Capital, TradingView
Following a strong decline on Friday, USD/JPY has failed to post a sustainable rebound.
Currently it has swung to the lower Bollinger band keeping the intraday bias as bearish.
Bearish investors should take the level of 106.65 (around the upper Bollinger band) as the Key Resistance.
Downside Support is only expect to come at 106.20 and 105.95 (a reaction low seen on August 11).
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.