Wednesday February 14 data releases (cont.)
16:45 NZD Retail Sales m/m http://www.forexfactory.com/images/m...mpact_high.gif 0.7% 0.7% -0.2%
18:50 JPY GDP q/q (p) http://www.forexfactory.com/images/m...mpact_high.gif 1.2% 0.9% 0.1%
18:50 JPY GDP Deflator y/y http://www.forexfactory.com/images/m...act_medium.gif -0.5% -0.5% -0.7%
19:01 GBP RICS House Price Balance http://www.forexfactory.com/images/m...impact_low.gif 28% 34% 37%
19:30 AUD House Price Index q/q http://www.forexfactory.com/images/m...impact_low.gif 0.9% 1.8% 2.2%
Yen Firms on Data
Japan’s Q4 GDP sharply exceeded market expectations, propping both the yen and yields of JGBs higher in early Tokyo trading. Consensus estimates were anticipating fourth quarter growth of 3.8%, instead the data revealed that the economy experienced robust annualized growth of 4.8%. On a quarterly basis, the economy expanded by 1.2%. Japan’s growth rate was its strongest in 3-years, raising market expectations for an imminent Bank of Japan rate hike – as reflected by higher bond yields.
The Bank of Japan meets to deliberate monetary policy next week and it remains unclear whether the BoJ will lift rates past its current levels at 0.25%. What is clear though is, if the Bank of Japan refrains from tightening policy further even with a robust Q4 growth rate of 4.8% -- surpassing that of both the US and Eurozone, speculators will aggressively attack the yen and we can expect renewed criticism from European officials.
Japanese Economics Minister Ota reiterated the softer aspects of the nation’s economy, highlighting the persistent weakness in consumption as well as in average wages. Also, Ota said that the end of deflation was in sight – which suggests that he is not fully confident Japan has defeated deflation. He expressed his expectations for the BoJ to support the economy with monetary policy. We’ll likely receive further jawboning from government officials leading up to next week’s policy meeting amid growing dissent toward a rate hike.
Result: USDJPY had already been dropping since February 11 at 17:30 ET at 122.10 by 135 pips down to about 120.75 at the time of the February 14 JPY GDP data release. The strong GDP data caused (or helped) the price of USDJPY to fall quickly another 95 pips to 119.80. As of 14:00 ET on February 15 USDJPY reached a low of 119.35, which could be the bottom of this trend.
16:45 NZD Retail Sales m/m http://www.forexfactory.com/images/m...mpact_high.gif 0.7% 0.7% -0.2%
18:50 JPY GDP q/q (p) http://www.forexfactory.com/images/m...mpact_high.gif 1.2% 0.9% 0.1%
18:50 JPY GDP Deflator y/y http://www.forexfactory.com/images/m...act_medium.gif -0.5% -0.5% -0.7%
19:01 GBP RICS House Price Balance http://www.forexfactory.com/images/m...impact_low.gif 28% 34% 37%
19:30 AUD House Price Index q/q http://www.forexfactory.com/images/m...impact_low.gif 0.9% 1.8% 2.2%
Yen Firms on Data
Japan’s Q4 GDP sharply exceeded market expectations, propping both the yen and yields of JGBs higher in early Tokyo trading. Consensus estimates were anticipating fourth quarter growth of 3.8%, instead the data revealed that the economy experienced robust annualized growth of 4.8%. On a quarterly basis, the economy expanded by 1.2%. Japan’s growth rate was its strongest in 3-years, raising market expectations for an imminent Bank of Japan rate hike – as reflected by higher bond yields.
The Bank of Japan meets to deliberate monetary policy next week and it remains unclear whether the BoJ will lift rates past its current levels at 0.25%. What is clear though is, if the Bank of Japan refrains from tightening policy further even with a robust Q4 growth rate of 4.8% -- surpassing that of both the US and Eurozone, speculators will aggressively attack the yen and we can expect renewed criticism from European officials.
Japanese Economics Minister Ota reiterated the softer aspects of the nation’s economy, highlighting the persistent weakness in consumption as well as in average wages. Also, Ota said that the end of deflation was in sight – which suggests that he is not fully confident Japan has defeated deflation. He expressed his expectations for the BoJ to support the economy with monetary policy. We’ll likely receive further jawboning from government officials leading up to next week’s policy meeting amid growing dissent toward a rate hike.
Result: USDJPY had already been dropping since February 11 at 17:30 ET at 122.10 by 135 pips down to about 120.75 at the time of the February 14 JPY GDP data release. The strong GDP data caused (or helped) the price of USDJPY to fall quickly another 95 pips to 119.80. As of 14:00 ET on February 15 USDJPY reached a low of 119.35, which could be the bottom of this trend.