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USD/JPY holds mid-159 after soft Japan growth, Fed bets fade
Japan's second-quarter GDP came in at a 1.1% annualized pace versus 2.0% forecasts, while swaps still price about an 80% chance of a Bank of Japan rate hike in September.
USD/JPY is little changed on Monday, trading in the mid-159.00s as the pair remains boxed in between support near 158.60 and resistance just above 159.50 for five straight days, a sign of consolidation rather than a clear trend, according to FXStreet.
The dollar tone is being capped by trimmed expectations for a Federal Reserve move next month after a run of underwhelming US data, a shift that can weigh on the case for a stronger USD.
The opposing force is Japan, where second-quarter GDP disappointed, printing 1.1% annualized against 2.0% forecasts and slowing from the prior quarter as domestic demand, capital spending, and consumption were soft.
Despite the growth miss, markets still focus on inflation pressure, with the GDP deflator up 2.6% year over year, and swaps pricing roughly an 80% chance of a Bank of Japan rate hike in September, leaving the near-term outlook balanced; FXStreet also notes technical levels around 159.60 resistance and 159.35 support.
Latest closeUSD/JPY 159.31 ▼0.1%