BTMU Research discusses USD/JPY outlook in light of yesterday's release of Japan Q1 GDP report which showed that Japan’s economy slows sharply in Q1.
"The Japanese economy became the latest major economy to disappoint expectations at the start of this year. It provides a further negative for the yen in the near-term as softer than expected growth in Japan will help to delay expectations for the BoJ to tighten policy in the year ahead. At the same time the yen is also being undermined by the paring back of fears over the risk of global trade war.
The combination of yen weakness alongside a stronger US dollar has helped to lift USD/JPY back above important technical resistance at both the 110.00-level and from its 200-day moving average at 110.20. The next important technical resistance level comes in at around 112.00 where it was trading at the start of this year," BTMU argues.