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US Dollar Drifts Higher after US Economy Pulls Further ahead of Japan

Japan fell to the world’s fourth largest economy recently, and a recovering US economy is helping the dollar inch higher.

The USD/JPY pairing today is up 0.465% at 150.594, with the US dollar gaining ground over the Japanese instrument. This is only days after it was revealed that Japan has dropped to the ranking of fourth largest economy in the world, behind Germany.

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The German economy has been stretching for years, while the Japanese economy has been growing steadily weaker. As an automaker, Japan is falling behind with the rise of the electric car. The weakening is also attributed to a weaker Japanese yen and a declining population. Japan simply cannot keep up with its competitors on the global market as its population ages out of the workforce and dwindles.

The Growth of the US GDP

The US economy is growing slowly stronger, despite a worse than expected inflation report this week. Those numbers are up 0.3% for the month of January, but other economic factors are working strongly in the United States’ favor.

One of those is the recent unemployment report, which showed that unemployment had dropped for January, and, not only that, but that it also dropped more than expected.

A recent jobs report also showed that more jobs were added in the US. Nonfarm payrolls increased by 353,000, which was also better than anticipated. Hourly earnings are up 0.6% as well, which indicates an economy that is growing healthier. Professional and business services added 74,000 jobs in the month of January, with retail trade adding 45,000 up from December. Yearly wages have climbed by 4.5% as well, and these kinds of numbers are helping the US dollar against other currencies.

The US dollar is up 0.25% against the Canadian dollar (CAD) for Friday and gained 0.2262% against the euro.

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Timothy St. John
Timothy St. John
Financial Writer - European & US Desks
Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.
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