Article Highlights

  • Fitch ratings agency downgraded Japanese gov’t debt
  • Japanese retail sales down by 9.7% year-over-year in March vs. estimated 7.4% drop
  • Australia’s CB leading index up by 0.5% in Feb
  • U.K. preliminary Q1 GDP reading coming up
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Bad data? So what?! Despite downbeat reports from Japan, the yen still managed to hold on to its current forex levels, as the lower-yielding currency stayed supported by risk aversion. EUR/JPY is trading around 129.60 (-0.03%) after testing the 130.00 resistance, USD/JPY is hovering above the 119.00 mark (+0.02%), and NZD/JPY is lower by 11 pips (-0.12%) at 90.83.

At the start of the trading session, credit rating agency Fitch announced a downgrade for Japan. Among the reasons for the downgrade were the rising level of government debt, the lack of structural fiscal measures in the budget, and the country’s weak economic performance. Later on, Japan printed its March retail sales report and showed a 9.7% annualized decline, worse than the projected 7.4% drop and the previous month’s 1.7% tumble.

On a more upbeat note, Australia reported a 0.5% increase in its CB leading index for February, hinting that economic performance probably improved in the following months. This is higher compared to the previous 0.4% reading, which explains why the Aussie advanced against most of its forex counterparts. AUD/USD is up 25 pips (+0.28%) at .7880, AUD/JPY is higher by 29 pips (+0.32%) and is closing in on the 94.00 handle, and EUR/AUD is down 44 pips to 1.3812 (-0.31%).

The British pound could steal the show in the upcoming London session, as the forex calendar shows that the U.K. preliminary GDP reading for the first quarter of the year is up for release at 9:00 am GMT. Analysts are expecting to see a 0.5% growth figure, which would be slightly weaker compared to the previous quarter’s 0.6% expansion. An even lower than expected reading might force the pound bulls to retreat from their current rallies so make sure you keep tabs on this release!

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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