Weaker-than-expected Japanese GDP growth and subdued US economic data keep the currency pair range-bound near key levels.
USD/JPY remains nearly unchanged in the mid-159.00s, trapped between support at 158.60 and resistance above 159.50 for the fifth consecutive session. The standoff reflects balanced pressures from both sides of the pair.
Japan’s second-quarter GDP grew at an annualized 1.1%, missing forecasts of 2.0% and slowing from the prior quarter. Domestic demand, capital spending, and consumption all softened, complicating the Bank of Japan’s policy outlook. However, a 2.6% rise in the GDP deflator underscored persistent inflation, keeping a September rate hike in play.
In the US, August’s underwhelming data has tempered expectations for a Federal Reserve rate cut next month, capping Dollar strength. Meanwhile, rising crude prices from Middle East tensions add to inflation concerns, further clouding the Yen’s trajectory.