USD/JPY: Japan’s Economy Grows by 1.6% to Exit Recession Slump, Yen Tumbles

The Japanese yen has been on the losing end against the dollar for five straight days.

• The USDJPY pushed to the upside early on Wednesday after Japan released its keenly awaited growth report. Gross domestic product for the Asian nation advanced by 1.6% year-over-year to break out of two straight quarters of a contracting economy – growth rate for Q3 and Q4 of 2022 dropped by 1% and 0.1%, respectively.
• Against that backdrop, the US dollar gained traction, hitting a high of ¥136.90 during Asian trading today. What’s more, the USD/JPY has been on a tear – over the past five days, the pair has added 2.3%, or over 300 pips, as the dollar has launched an all-out offensive across the forex board.
• The short-term rally in the USD/JPY mirrors similar movements in other dollar-tied pairs. The EURUSD has been dropping this week, alongside the GBPUSD, both pairs were dominated by a stronger greenback. Still, tomorrow’s initial jobless claims and Fed Chair Jerome Powell’s speech on Friday might inject fresh volatility to stir things up.