USD/JPY Hits New Low With Recovery On The Horizon
The USD has continued to weaken against the JPY and the pair has been trading around the 105.4 region in recent days.
The Bank of Japan has left its monetary policy unchanged and the Yen has been strengthening steadily and even temporarily reached a new multi-year high of 105.69 last Friday. While the ceasefire in the Ukraine helped strengthen the Yen, the currency was also aided by weak non-farm payroll data which slightly weakened the dollar.
However, the Yen could weaken in the coming days as Data released on Monday showed that Japans’ GDP shrank by an annualised 7.1% in the second quarter, 0.3% more than the predicted contraction.
Business spending dropped 5.1% in the three months to June and household spending fell 10.4% on a year-over-year basis.
Furthermore, the Dollar is expected to strengthen over the coming months as the Federal Reserve brings its asset purchase program to an end.