The Japanese yen strengthened against the US dollar on Monday, hitting a one-month high following the release of statistics indicating Japan's return to economic growth in the fourth quarter of 2023. This development effectively ends the previously declared technical recession .
Japan's GDP saw a quarterly increase of 0.1% and an annual growth of 0.4%. These figures revise previous estimates, suggesting drops of 0.1% and 0.4%, respectively. In comparison, the Japanese economy contracted 0.8% quarterly and 3.3% annually in the third quarter of 2023.
Positive economic data has fueled market speculation about a possible interest rate hike by the Bank of Japan, with some economists and traders anticipating such a move as soon as March.
Bank of Japan board member Junko Nakagawa recently commented on the visible prospects of meeting inflation targets and a positive wage cycle, further supporting the yen.
The Japanese currency is currently benefiting from the weakening of the US dollar and a drop in US government bond yields amid dovish rhetoric from the Federal Reserve.
technical analysis of
On the H4 USD/JPY chart, a correction wave has completed to the level 146.48 (tested from above). The market is now forming a consolidation range above this level, hoping to break higher and start the fifth wave of growth towards 152.72. The MACD oscillator supports this scenario, with its signal line trading below zero at lows and ready to rise.
On the USD/JPY H1 chart, a correction wave has ended to 146.48. A growth momentum to 147.26 and its correction to 146.55 has been executed, essentially establishing the limits of the consolidation range. With a bullish breakout, growth towards the level of 148.00 is anticipated. This objective is the first of the wave of growth. The stochastic oscillator confirms this scenario, with its signal line above the 50 mark and heading strictly towards 80.
By RoboForex Analysis Department
Disclaimer
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
