The Yen continues growing. Overview for 08.06.2018

USDJPY is sliding down on Friday; investors are analyzing the Japanese GDP report and the USD behavior.

On Friday morning, the Japanese Yen is getting stronger against the USD because the latter is becoming less attractive to investors. The current quote for the instrument is 109.69.

The statistics published by Japan in the morning were pretty interesting. The final GDP report showed ‑0.2% q/q in the first quarter 2018 against the expected reading of -0.1% q/q. The actual reading matched the first estimate and aggravated the situation, because in the fourth quarter 2017 the country’s economy improved by 0.1% q/q. On YoY, the indicator lost -0.6%.

The components of the report showed that the negative contribution to the indicator was made by the Private Consumption (-0.1%). Another problem for the Japanese economy is the House Spending.

The BoJ’s economic outlook says that the GDP is expected to increase in the second quarter 2018, but this doesn’t exclude problems with the above-mentioned indicators. The country’s economy is still focused on the external demand, that’s why there appear more risks of trade wars. Japan’s being focused on the export is not new to anybody, but the Japanese government hasn’t been able to revive the internal demand due to some domestic problems. This is what dragging the entire system down.

The Yen is getting more expensive today, but not because of the statistics, but due to the USD weakness.