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Forex - Yen gains despite weaker than expected Q4 GDP

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Investing.com -

Investing.com - The Japanese yen held stronger on Monday in Asia despite weaker than expected economic growth last quarter.

Japan's fourth quarter economic growth clocked in at a gain of 0.6%, well below the quarter-on-quarter gain of 0.9% expected.

Earlier, New Zealand reported retail sales rose 1.7% quarter-on-quarter, beating an expectation of a 1.3% gain.

NZD/USD traded at 0.7480, up 0.34%, while USD/JPY changed hands at 118.68, down 0.05%. AUD/USD traded at 0.7770, up 0.16%.

Markets in the U.S. are closed for the Presidents Day holiday.

Last week, the dollar slid against the yen on Friday after weak data on U.S. consumer sentiment coming on the heels of other soft economic reports saw investors reassess expectations for a mid-year rate hike by the Federal Reserve.

The drop in the dollar came after data on Friday showed that U.S. consumer sentiment unexpectedly deteriorated in February.

The preliminary reading of the University of Michigan's consumer sentiment index fell to 93.6, down from January's final reading of 98.1.

Economists had forecast an unchanged figure.

The report came a day after data showing that U.S. retail sales unexpectedly fell 0.8% last month after dropping 0.9% in December, indicating that consumer spending remained sluggish at the start of the year.

The weak data prompted investors to trim back long positions in the greenback ahead of a three-day holiday weekend.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was quoted at 94.16, down 0.08%.

The euro found support after data on Friday showed that Germany's economy, the euro zones largest, grew 0.7% in the fourth quarter, more than double the 0.3% forecast by economists.

The euro zone economy expanded by a larger-than-expected 0.3% in the three months to December, but Greece's economy contracted 0.2% in the same period.

Meanwhile, officials from Greece and the European Union were due to hold fresh talks on Monday after talks on a new debt deal last week ended without an agreement.

Greece's current €240 billion bailout is due to expire on February 28 and the new Greek government does not want it extended, fuelling fears over a conflict with its creditors which could trigger the country's exit from the euro zone.

In the coming week, investors will be focusing on Wednesday's minutes of the latest Federal Reserve meeting for further indications on when the Fed may start to hike interest rates.

Wednesday's policy announcement by the Bank of Japan and Friday's data on euro zone private sector activity will also be closely watched.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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