Japanese Yen Struggles to Hold Ground After Awful GDP Print

The Japanese yen was vulnerable today after the release of an awful report on the country’s gross domestic product. Furthermore, investors were moderately hopeful that China’s efforts to battle the deadly epidemic of a coronavirus will bear fruit. Nevertheless, the yen did not perform that bad considering the circumstances, even managing to gain on some of its rivals.
Japan’s Cabinet Office reported that GDP dropped by 1.6% in the fourth quarter of 2020, much more than economists were anticipating — 1.0%. Furthermore, the economy contracted as much as 6.3% last quarter on an annual basis — the biggest decline in six years.
The Ministry of Economy, Trade, and Industry released a report on industrial production in December, and it was not particularly good either. While the increase of 1.2% was not a bad result by itself, market participants were expecting the same 1.3% rate of growth as in the previous month. Additionally, the indicator dropped 3.1%, year-on-year.
Meanwhile, COVID-19 disease continued to spread across China. China’s National Health Commission reported on February 16 that the number of confirmed coronavirus cases rose by 2,048 (compared with 2,009 on February 15) to 70,548. The death toll rose by 105 (versus 142 a day ago) to 1,770.
USD/JPY rose from 109.80 to 109.87 as of 14:17 GMT today, bouncing from the daily low of 109.71. EUR/JPY edged up from 119.01 to 119.07. NZD/JPY declined from 70.77 to 70.60.

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