The Japanese yen rocketed high overnight and this morning across the major, but the low-yielder ultimately ended the day lower – especially versus the high-yielding New Zealand dollar – as key JPY cross support levels were hit.
Meanwhile, GDP in Japan contracted 2.4 percent in Q2 from a year earlier due to a decline in exports, housing investment, and consumer spending. With global demand anticipated to slow and Japanese consumers grappling with persistently low wage growth and high food and energy prices, there is little hope for expansion to recover in the near-term. Nevertheless, traders should continue to keep an eye on technical levels and risk sentiment, as the Japanese yen tends to trade based on these factors rather than fundamentals.
