Japan’s preliminary GDP for Q2 showed a +0.3% quarter-on-quarter growth, exceeding the expected +0.1%. This marks the fifth consecutive quarter of GDP increase for the country.<\/p>\n
A stronger GDP influences the Bank of Japan’s stance, possibly leading to higher yields and a stronger yen. Consequently, the yen gained value, with USD\/JPY moving from early highs above 147.80 to around 147.60.<\/p>\n
The stronger GDP print of +0.3% for the second quarter gives the Bank of Japan more reason to continue normalizing policy. This fifth consecutive quarter of growth strengthens the case for moving away from an ultra-easy stance. We believe the market will now price in a higher probability of another rate hike before year-end.<\/p>\n
This data builds on an already compelling inflation picture. With the latest nationwide core CPI for July registering 2.1%, inflation has now remained above the BoJ’s 2% target for much of the past two years. This sustained pressure, combined with solid economic growth, makes it difficult for the central bank to delay further action.<\/p>\n
For derivative traders, this signals an opportunity to position for a stronger yen. We are reminded of the BoJ’s historic pivot away from negative rates back in March of 2024, which showed they are willing to act. After seeing USD\/JPY trade as high as 160 last year, a significant downward correction is possible if the popular carry trade begins to unwind.<\/p>\n
In the coming weeks, we anticipate increased currency volatility heading into the September BoJ meeting. Traders should consider buying USD\/JPY put options or establishing put spreads to position for a move lower with defined risk. The break below 148.00 is a key technical signal, and we will be watching for a potential test of the 145 level.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Japan\u2019s Q2 GDP grew 0.3%, surpassing expectations, strengthening the yen and influencing BOJ policy outlook.<\/p>\n","protected":false},"author":62,"featured_media":17043,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-29141","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29141","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=29141"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29141\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17043"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=29141"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=29141"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=29141"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}