Daily Analysis USDJPY - 15 Aug 2023

The preliminary Q2 2023 Gross Domestic Product (GDP) figures for Japan exceeded expectations with a growth of 1.5% QoQ, compared to the anticipated 0.8% and the previous 0.7%. Additionally, Japan's Industrial Production rose to 2.4% MoM in June, surpassing the expected 2.0% and the previous data.

Japan's Economy Minister, Shigeyuki Goto, predicts a moderate economic recovery, but warns about the risks of a global slowdown and the impact of rising prices. Japanese Finance Minister Shunichi Suzuki hinted at potential intervention from Tokyo, influencing USD/JPY prices, though without targeting a specific price level or favoring rapid fluctuations.

The US Dollar Index (DXY) retreated from a five-week peak, experiencing its first daily loss in four sessions, due to unfavorable inflation indications. The New York Fed's one-year inflation expectations dropped to 3.5% for July, its lowest point since April 2021. Despite this, the survey also indicated confidence in favorable labor market conditions and economic changes.

Meanwhile, the US 10-year Treasury bond yields fluctuated around the highest level since November 2022, at 4.20%. The mildly positive US and European stock futures contributed to positive sentiment in the market and impacted USD/JPY bullish movements.

USDJPY is going toward the resistance level of 146.50. The bullish trend seems strong but the possibility of an intervention by the BOJ seems more than ever possible.