Forex News: Yen Falls After Weaker-than-expected Japan GDP Data

Yen Falls After Weaker-than-expected Japan GDP Data

(RTTNews) - The Japanese yen weakened against other major currencies in the European session on Monday, as the Bank of Japan's tightening plans have been called into question by weaker-than-expected Japanese GDP numbers.

Data from the Cabinet Office showed that the Japan's gross domestic product expanded a seasonally adjusted 0.3 percent on quarter in the second quarter of 2026. That missed forecasts for a gain of 0.5 percent, which would have been unchanged.

On a yearly basis, GDP was up 1.1 percent - again shy of expectations for an increase of 2.0 percent following the upwardly revised 1.9 percent gain in the three months prior.

Capital expenditure dropped 1.2 percent on quarter, missing forecasts for a gain of 0.4 percent following the downwardly revised 1.0 percent decline in the previous quarter.

Additionally, investors keep a close eye on geopolitical developments in the Middle East and ponder the U.S. Federal Reserve's next move on interest rates.

Ahead of the Fed's upcoming Jackson Hole meeting later this month, traders eagerly await the minutes of last month's FOMC meeting, to be released Wednesday, for fresh insights on how board members view inflation and the interest-rate environment.

According to CME's FedWatch tool, expectations for a rate hike at the Fed's September meeting currently stand at about 33 percent.

Market participants also await quarterly earnings from retailers, including Home Depot, Lowe's, Target and Walmart this week for fresh clues about the health of the world's largest economy amid persistent inflation.

On the geopolitical front, Iran said it has not yet decided whether to resume negotiations with the Unted States and that a "new path" must be established to resolve the conflict.

Saudi Arabia has warned of a "potential danger" in Jazan province in the country's southwest amid renewed Houthi attacks on Saudi energy facilities.

At least 11 people were killed in Israeli strikes on southern Lebanon on Saturday, one of the deadlines days of fighting in months, clouding prospects for a ceasefire agreement to end the conflict.

In other economic news, Japan's industrial production expanded more than initially estimated in June, reaching its highest level in five months, according to official data.

Industrial production rose 1.9 percent month-on-month in June, significantly outpacing the 0.1 percent increase in May. The initial flash estimate had projected a more modest 0.3 percent gain.

On a yearly basis, the decline in industrial production eased to 2.2 percent from 5.0 percent in May.

In the European trading today, the yen fell to near 3-week lows of 184.66 against the euro, 215.95 against the pound and 196.90 against the Swiss franc, from early highs of 184.12, 215.42 and 195.85, respectively. If the yen extends its downtrend, it is likely to find support around 188.00 against the euro, 219.00 against the pound and 202.00 against the franc.

Against the U.S. dollar, the yen edged down to 159.28 from an early high of 158.85. The yen is likely to find support around the 164.00 region.

Looking ahead, U.S. New York Empire state manufacturing index for August and U.S. NAHB housing market index for August are slated for release in the New York session.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2026 RTTNews.com. All Rights Reserved

Market News provided by RTTNews