The USD/JPY pair remains near its recent peak levels.
The Japanese yen, paired with the US dollar, continues to show weakness, with the current USD/JPY exchange rate standing at 150.14.
Despite a slight rebound from its recent lows, the performance of JPY quotes is not particularly impressive. The market’s attention is now focused on the state of the Japanese economy, and today’s statistics confirm the nation’s descent into recession.
In Q4 2023, the country’s GDP declined by 0.4% year-on-year, following a 3.3% drop in the previous quarter. This starkly contrasts with the primary forecast of a 1.4% year-on-year increase. Factors such as weak domestic demand and subdued capital expenditure are proving detrimental to the economy. Without a boost from these crucial drivers, the economy is struggling to enter positive territory.
A recession is conventionally confirmed when GDP contracts for two consecutive quarters, which is the case here.
There is a prevailing belief that the recession will intensify at the end of Q1 2024, bringing negative implications for the JPY. Under such circumstances, the Bank of Japan is unlikely to opt for tightening monetary mechanisms.
The post JPY Under Scrutiny Again: Overview for February 15, 2024 appeared first at R Blog – RoboForex.