There has been a slew of data released this morning from Japan and the main headlines of interest is that GDP came in at 0.5% QoQ vs 0.3% exp.

The result is a positive for the JPY and will potentially help the USD/JPY hold the 112.00 level, which it has been testing.

There is not always a huge response to Japanese data and we are seeing that again today with the USD/JPY little changed on the day.

On a fundamental level, the Japanese economy is still not near where it would like to be in terms of inflation and growth which has been the story for many years.

But nevertheless, this is a good result.

USD/JPY Outlook

The USD/JPY has been testing 112.00 and so far it has held quite well.

The run-up has been on the back of a strong USD and the dovish outlook from the FED, however, as we are seeing there are some small signs of life for the JPY.

Interestingly, we really saw the US Dollar (DXY) breaking out to new highs overnight and the USD/JPY was weak. That might indicate there is a bit of strength in the JPY – more than what we have seen for some time.