- GDP in the first quarter contracted to 1.6%.
- The dollar remains firm, while the yen falls, despite risk aversion.
- USD/JPY very close to the maximum in decades of last week.
Following the US growth data, USD/JPY remained trading around 136.50, in the area of one-week highs. The yen shows weakness on Wednesday despite the decline in equity markets.
The pair bottomed on Wednesday at the start of the European session at 135.73, but then rebounded sharply climbing to 136.59, the highest level since June 22nd. In this way, the USD/JPY is one step away from marking a new maximum in more than two decades, of surpassing last week’s ceiling, which is located at 136.70.
Stocks on Wall Street point to a flat open after Tuesday’s plunge. In Europe the main squares fall. Recession fears are back on the scene. Such context on Wednesday is not helping the yen. Treasury bond yields do not show relevant changes.
In the US, a new estimate of GDP growth for the first quarter was released, which was revised downwards from a contraction of 1.5% to 1.6%. This data had no impact on the market, since it is data from the period from January to March.
The focus now shifts to the forum European Central Bank which takes place in Portugal. A panel discussion featuring Jerome Powell (Chairman of the Federal Reserve), Christine Lagarde (President of the European Central Bank) and Andrew Bailey (Governor of the Bank of England) will begin shortly.
Technical levels
Source: Fx Street
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