Japanese Yen Rallies Against US Dollar on Upbeat GDP Data

The Japanese yen today traded sideways against the US dollar during the Asian session despite the release of upbeat Japanese GDP data. The USD/JPY currency pair later fell as the yen rallied against the much weaker greenback during the American session.
The USD/JPY currency pair today fell from a high of 106.38 in the London market to a low of 105.86 during the American market and was near these lows at the time of writing.
The currency pair traded sideways during the Asian session despite Japan’s Cabinet Office releasing an upbeat Q2 GDP report. According to the report, Japan’s economy contracted 7.9% versus the expected 8.1% translating to an annualised print of -28.1% as compared to the expected -28.6% print. The pair hit its daily highs during the London session as the greenback rallied as tracked by the US Dollar Index to a high of 93.48. However, it was the declining US 10-year treasury yield, which fell to a low of 0.679% that gave the yen a significant advantage.
The lack of significant releases from the US docket meant that the pair was heavily susceptible to market sentiment. The release of the upbeat US NFIB business optimism index for August, which came in at 100.2 versus the expected 98, could not stop the pair’s fall.
The currency pair’s future performance is likely to be affected by market sentiment due to the lack of major releases.
The USD/CAD currency pair was trading at 106.03 as at 18:15 GMT, having fallen from a high of 106.38. The EUR/JPY currency pair was trading at 124.98, having dropped from a high of 125.64.
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