The USDJPY exchange rate has overhead resistance targets with growth figures released.
USDJPY – Daily Chart
The price of USDJPY is trading at 136.21, with the first resistance at the 137.85 level.
The dollar reversed early losses on the day despite US retail sales growing less than expected in April. The underlying trend was still robust, hinting that consumer spending was strong in the second quarter. The economy has been battling a growing risk of recession this year.
According to the Commerce Department, retail sales were up 0.4% last month. The numbers for March were also revised, showing a drop of 0.7% instead of 0.6%. Economists polled by Reuters had expected a reading of 0.8% this month. The rise in retail sales boosted the jobs market with hopes of recovery after a weak February and March.
The economy grew at a 1.1% pace in the last quarter. The Atlanta Fed estimates GDP to rise by 2.7% annually in the second quarter.
Japan will release its GDP figures ahead of the Asian session on Wednesday, with analysts expecting a sharp jump from 0.1% to 0.7% annualised for the first quarter.
However, that figure could be at risk after weaker consumer spending in the most recent statistics. Japan’s consumer spending unexpectedly dropped in March at the fastest rate in a year. There was also a twelfth month of lower wages due to higher inflation.
Tuesday’s data also adds to the uncertainty around the Bank of Japan’s policy outlook due to slower global growth and worries about the financial sector as it eventually unwinds the ultra-loose monetary policy. Household spending dropped 1.9% from the previous year in March, versus economists forecasting a 0.4% rise.
Japan’s economy probably grew an annualised 1.4% in January-March and will continue growing at the same pace in the second quarter, economists said in the latest Reuters poll.
