The Japanese Yen initially turned a blind eye to unsatisfactory GDP figures with USD/JPY ensconced slightly above 140.00 and in less than an hour, it rose to 140.50.
Japanese seasonally adjusted 3Q quarter-on-quarter GDP came in -0.3% against forecasts of 0.3% and against the 0.9% previously.
Seasonally adjusted annualized quarter-on-quarter GDP to the end of September was -1.2% instead of 1.2% anticipated and 3.5% prior.
USD/JPY had been deteriorating following the release of the CPI last Thursday that had been perceived as somewhat benign by the market. This led to assumption that the Federal Reserve may need not be aggressive with the rate hike cycle as formerly thought.
These notions have been confronted to some degree in the consequent trading sessions with Treasury yields holding ground. The 10-year note is at 3.86% after visiting 3.81% immediately after US CPI. The USD is also seeing small profits at the end of the New York session going into Tuesday’s trade. With the Bank of Japan yield curve control program, the bond spread is mostly determined by Treasury yield moves. Today’s data might suggest that the central bank will maintain loose monetary policy.
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