Release Explanation: It measures the monetary value of all goods and services produced within a Country’s borders in a specific time period. GDP is calculated on an annual basis, is the broadest measure of activity, and the primary gauge of each economy’s overall health. It includes all Company and Personal consumption, government outlays, investments, and exports fewer imports, that occur within a defined territory. A strong annual GDP outlook will lead to strong investment in an economy especially from overseas. A weak annual GDP outlook will usually lead to a slowdown in the economic business cycle. The yearly forecast is as important as the actual release number.
Trade Desk Thoughts: The Japanese economy contracted to 0.5 percent which is below the expected forecast of 0.2 percent. On an annualized basis, the final GDP decreased by 1.8 percent which was also lower than the 0.9 percent decrease that had been expected. The first recession to hit Japan since 2001 is increasing as companies slow production, while cutting jobs and spending with the anticipation that exports will fall further. With the threat of the first global recession seen in decades, economists are expecting at least another two or three quarters of negative growth to come out of Japan as exports slow.
Forex Technical Reaction: The Japanese yen has found resistance shortly after this release at the neutral LFB pivot point of 93.08.