Yen pushes higher, GDP softer than expected – heochaua

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<li>Japan&#8217;s Q3 GDP revised lower to -2.9%</li>
<li>Japanese yen gains ground but can&#8217;t consolidate</li>
<li>US nonfarm payrolls expected to rise to 180,000</li>
</ul>
<p>The Japanese yen continues to show strong swings. In the European session, USD/JPY is trading at 143.94, down 0.16%. Earlier, the yen gained as much as 1.1% but couldn&#8217;t consolidate and surrendered almost all of these gains.</p>
<p><strong>Japan&#8217;s Q3 GDP declines more than expected</strong></p>
<p>Japan&#8217;s GDP contracted by 2.9% y/y in the third quarter, revised downwards from the initial estimate of 2.1% and below the revised market forecast of -2.0%. Consumer and business spending declined, and real wages and household spending also fell. Inflation remains high and continues to squeeze consumers.</p>
<p>The Bank of Japan will be paying particular attention to the fact that wages continue to fall sharply. inflation-adjusted real wages declined by 2.3% y/y in October, marking a 19^th straight monthly decline. The BoJ has insisted that it will not exit its ultra-loose policy until 2% inflation is sustainable, and that would require stronger wage growth. The soft GDP release and the disappointing wage data could complicate the BoJ&#8217;s plans to tighten policy.</p>
<p>The BoJ&#8217;s signals this week that it is looking to shift policy sent the yen surging on Thursday, with massive gains of 2.14%. Governor Ueda and BoJ Deputy Governor Ryozo Himino hinted at changes in policy, which was most unusual from the normally tight-lipped central bank. The yen reacted with huge gains and the December 18-19 meeting will be eagerly anticipated, as the BoJ could make some major announcements.</p>
<p><strong>Nonfarm payrolls expected to rise</strong></p>
<p>All eyes are on the US nonfarm payroll release later today. After falling sharply in October to 150,000 from a revised 297,000, nonfarm payrolls are expected to rebound to 180,000. If nonfarm payrolls are weaker than expected, speculation of a Fed rate cut will rise, and that could push the US dollar lower in the North American session.</p>
<p>.</p>
<p><strong>USD/JPY Technical</strong></p>
<ul>
<li>USD/JPY tested support at 143.72 earlier. Below, there is support at 143.27</li>
<li>There is resistance at 144.39 and 144.84</li>
</ul>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/12/USDJPY_2023-12-08_10-46-51.png"><img loading="lazy" class="alignnone wp-image-809000" src="https://www.marketpulse.com/wp-content/uploads/2023/12/USDJPY_2023-12-08_10-46-51-300×143.png" alt="" width="400" height="191" srcset="https://www.marketpulse.com/wp-content/uploads/2023/12/USDJPY_2023-12-08_10-46-51-300×143.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/12/USDJPY_2023-12-08_10-46-51-1024×488.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/12/USDJPY_2023-12-08_10-46-51-768×366.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/12/USDJPY_2023-12-08_10-46-51-1536×732.png 1536w, https://www.marketpulse.com/wp-content/uploads/2023/12/USDJPY_2023-12-08_10-46-51.png 1835w" sizes="(max-width: 400px) 100vw, 400px" /></a></p>