Solid News

Japanese Economy Showed Local Growth

2/14/2023 12:05 PM

The yen is trying to seize the initiative in the USD/JPY pair and is rising on positive macroeconomic data. At the moment, the quotes of the trading instrument are around 131.97.

So, this morning, data on Japan's Q4 2022 gross domestic product (GDP) was published: the indicator increased by 0.2% from –0.3% at the previous estimate. However, the market reaction was restrained, as analysts expected an increase of 0.5%. The annual value was forecast to rise by 2.0% YoY but corrected only by 0.6%, which is still better than –1.0% in the previous period. It should be noted the local growth of industrial production in December increased by 0.3% after the correction of –0.1% earlier. Thus, the planned recovery of the national economy may act as a catalyst for strengthening the yen positions in the USD/JPY pair this week.

The US dollar retreated to around 103.000 in the USD Index ahead of the publication of the January data on the dynamics of consumer prices in the US today at 15:30 (GMT+2). Current forecasts suggest a slowdown from 6.5% to 6.2% YoY and the acceleration from 0.1% to 0.5% MoM. Recall that this statistic is a determining factor in the choice of the US Federal Reserve's monetary policy, and if inflation data confirms an increase in negative dynamics, the regulator is likely to continue raising interest rates at the March meeting.

On the daily chart, the trading instrument is moving within the global downward channel with dynamic boundaries 126.00–133.00.

Technical indicators are uncertain: fast EMAs on the Alligator indicator remain near the signal line, and the AO histogram forms rising bars close to the transition level.

Resistance levels: 133.00, 135.80. | Support levels: 130.70, 127.30.

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