When is Japan’s Q3 GDP and how could it affect USDJPY?

Japan’s Finance Ministry is up for releasing the first version of the third quarter (Q2) Gross Domestic Product (GDP) figures for 2022 at 23:50 GMT on Monday, early Tuesday morning in Asia.

Market consensus bears the burden of the global supply chain blockade, mainly due to the Russia-Ukraine tussle, which in turn weighs on the GDP forecasts suggesting a 0.30% QoQ figure versus 0.9% prior. The details mention that the Annualized GDP is expected to have eased 1.1% from 3.5% in previous readings.

Considering the Bank of Japan’s (BOJ) defense of the easy money policies, today’s Japanese GDP data appears the key to the USDJPY pair buyers, especially due to the latest rebound.

Ahead of the event, Westpac mentioned,

Despite the ongoing rebound in consumption, materially weaker trade will likely see GDP growth slow notably in Q3 (market forecst: 0.3% QoQ).

How could it affect USD/JPY?

Considering the risks to Asia’s major economy highlighted by the BOJ policymakers, in the latest meeting, any further weakness in the GDP figures will push the Japanese central bank towards further easing. However, the policymakers are already conveyed their easy-money policy during the times when the major central banks were rushing towards higher rates. Hence, today’s Japanese GDP numbers, even if provide a positive surprise, might not be able to renew the Japanese Yen’s (JPY) strength unless being extremely high.

Technically, the USDJPY pair’s daily closing below the 100-DMA support, now immediate resistance around 140.85, keeps the pair directed towards an upward-sloping support line from late May, close to 136.80 at the latest.

Key Notes

USDJPY reclaims 140.00, after dropping to multi-month lows at around 138.00s

About the Japanese Q3 GDP

The Gross Domestic Product released by the Cabinet Office shows the monetary value of all the goods, services and structures produced in Japan within a given period of time. GDP is a gross measure of market activity because it indicates the pace at which the Japanese economy is growing or decreasing. A high reading or a better than expected number is seen as positive for the JPY, while a low reading is negative.