Yen Strengthens Despite Soft Data by Korman Tam

The yen pushed higher against the greenback, firming to 112.62 and advancing versus the euro toward 155.19. Heightened risk aversion continues to benefit the Japanese currency amid growing worries of a US recession following last week’s dismal labor report. The yen is seen maintaining its stance as a safe haven currency and inversely track equity performances.
Economic data released earlier revealed softer-than-forecast GDP growth for Q2 in Japan, which shrunk by 0.3% q/q and by 1.2% y/y. The weak growth reports raise fears that the US economic slowdown may be taking its toll on Japan’s export driven economy. The Q2 revised capital expenditures reading was better than estimates, albeit down by 1.2% versus calls for a 1.8% decline.

USDJPY holds steady beneath the 113-level, with support beginning at 112.60, followed by 112.30 and 112. Subsequent floors will emerge at 111.60, followed by 111.20 and 111. Resistance begins at 113, backed by 113.30 and 113.75. Additional ceilings will emerge at 114, followed by 114.50 and 115.