© Dukascopy Bank SA
USD/JPY traded in a mixed environment during the last week of February; however, the pair managed to show a strong increase toward the end of the period. The Japanese Yen entered a positive tendency in early Asia on Wednesday ahead of first quarter growth figures with markets focused on events in Europe and negotiations over Greece's debt. In Japan first quarter GDP rose 0.6% for an annualized pace of 2.4%, outstripping expectations of an 0.4% gain quarter-on-quarter and for a year-on-year pace of 1.5%. Meanwhile, economists anticipated GDP to continue growing in the second quarter. The median economists' forecast for second quarter GDP is an annualized 2.26%, according to the latest monthly ESP Survey of 40 economists by the Japan Center for Economic Research conducted from April 28 to May 7. Moreover, by the end of the trading week, the Japanese Yen strengthened after the central bank kept monetary policy steady as expected. The Bank of Japan board on Friday voted as expected to keep monetary policy constant, with Takahide Kiuchi repeating his call for a lower bond buying target in a singular note of dissent. Mr. Kiuchi urges the BoJ to cut the level of purchases from 80 trillion yen annually set in October 2014 to about 45 trillion yen. The board however did say that private consumption domestically has been resilient and exports are picking up, though downside risks remain from weak growth in Europe. The sentiment among Dukascopy traders is rather strong for this currency pair, as the average expectation for the end of this week is located around 119.9 level, while 66% of all votes are currently bullish. This week's possible drivers for this pair include Japan's foreign bond investment and Markit services PMI on Wednesday, as well as the US ISM non-manufacturing PMI, mortgage application numbers, and the labour market data on Friday.
© Dukascopy Bank SA