Japan’s strong GDP in Q2 fails to boost yen
2023-08-15
Summary:
Japan’s economy posted its third straight quarterly expansion of an annualized 6% helped by a robust export growth, handily beating market expectations of 3.1% gain.
Japan’s economy posted its third straight quarterly expansion of an annualized 6% helped by a robust export growth, handily beating market expectations of 3.1% gain.
Nikkei 225 index extended gains slightly to trade up nearly 1%, while the Japanese yen pared losses against the U.S. dollar.
However, the yen is still trading around 145 after breaking the key level since for the first time since November 2022.
The yen could push back ‘in the 145-148 range’ while short position ‘will likely rebuild further’ without official intervention, said HSBC on Monday.
On the other side, High longer-end U.S. yields on concerns about the U.S. budget deficit and Treasury supply adds to the dollar’s resilience, according to bank.
Japan’s economy will be slowing again across the second half of the year, said Marcel Thieliant, head of Asia-Pacific at Capital Economics, wrote in a note.
He added that the jump stemmed from the second-largest contribution from net trade in the 28-year history of the current GDP series. That offset a surprise drop in private consumption as well as anemic capital expenditure.
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