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16 Apr 2014
USD/JPY rallies on declining yen safety demand
FXStreet (London) - USD/JPY has rallied through the session so far after data released overnight indicated that the Chinese economy slowed less than consensus expectations in the first quarter. The slower than expected deceleration in Chinese growth damped demand for yen safety.
Official Chinese GDP data released overnight showed that growth had fallen to an 18-month low of 7.4 percent year-on-year in the first quarter. The 1.4 percent quarter-on-quarter growth represents the lowest level since the third quarter of 2010. Despite the weak numbers, Chinese growth held above consensus expectations of a slow down to 7.3 percent year-on-year.
Japanese stimulus chatter
In addition, against the recent yen strength as well as declining equity markets, speculation has mounted that the Bank of Japan is preparing to intervene with an expansion of its current stimulus measures to fight deflationary pressures. In testimony before the Japanese parliament, Bank of Japan governor Haruhiko Kuroda attempted to quash those rumours and played down the longer-term importance of recent stock market declines.
Japanese deflation concerns have increased following the implementation of a sales tax hike earlier this month.
The next BoJ meeting is on 30 April when the central bank will release its latest long-term economic forecasts.
USD/JPY rallies through morning session
USD/JPY is currently trading at JPY102.2850. The pair has consolidated between JPY102.18 and JPY102.3800 after steadily rallying through the morning session. The pair has gained 0.45 percent on the opening of JPY101.8515.
Official Chinese GDP data released overnight showed that growth had fallen to an 18-month low of 7.4 percent year-on-year in the first quarter. The 1.4 percent quarter-on-quarter growth represents the lowest level since the third quarter of 2010. Despite the weak numbers, Chinese growth held above consensus expectations of a slow down to 7.3 percent year-on-year.
Japanese stimulus chatter
In addition, against the recent yen strength as well as declining equity markets, speculation has mounted that the Bank of Japan is preparing to intervene with an expansion of its current stimulus measures to fight deflationary pressures. In testimony before the Japanese parliament, Bank of Japan governor Haruhiko Kuroda attempted to quash those rumours and played down the longer-term importance of recent stock market declines.
Japanese deflation concerns have increased following the implementation of a sales tax hike earlier this month.
The next BoJ meeting is on 30 April when the central bank will release its latest long-term economic forecasts.
USD/JPY rallies through morning session
USD/JPY is currently trading at JPY102.2850. The pair has consolidated between JPY102.18 and JPY102.3800 after steadily rallying through the morning session. The pair has gained 0.45 percent on the opening of JPY101.8515.