Yen Rises As Japan Economy Expands In Q2

(RTTNews) - The Japanese yen strengthened against other major currencies in the Asian session on Friday, after Japan's gross domestic product expanded on quarter in the second quarter of 2025.

Data from the Cabinet Office showed that Japan's gross domestic product expanded a seasonally adjusted 0.3 percent on quarter in the second quarter of 2025. That beat forecasts for an increase of 0.1 percent following the upwardly revised 0.1 percent gain in the previous three months .

On an annualized basis, GDP was up 1.0 percent - again topping forecasts for a gain of 0.4 percent and up from the upwardly revised 0.6 percent increase in the three months prior.

Capex was up 1.3 percent on quarter, beating forecasts for 0.5 percent and up from 1.0 percent in Q1.

External demand rose 0.3 percent on quarter, while the GDP price index was up 3.0 percent on year and private consumption added 0.2 percent on quarter.

The report showed that the economy is improving moderately, according to Japan's Economy Minister Ryosei Akazawa.

The Asian stock market traded mixed as the hotter-than expected US producer price inflation data and a resilient US labor market softened expectations of a higher half point interest rate cut by the US Fed in September. Traders also remain cautious ahead of the crucial U.S.-Russia talks to end the ongoing three-plus-year Russia-Ukraine war.

The hotter-than-expected US producer price inflation data partly offset optimism about a September interest rate cut generated by the US consumer price inflation data released earlier this week.

However, CME Group's FedWatch Tool is currently still indicating a 92.6 percent chance the Fed will lower rates by a quarter point next month

In the Asian trading today, the yen rose to 171.51 against the euro, 199.21 against the pound and 182.34 against the Swiss franc, from yesterday's closing quotes of 172.06, 199.82 and 182.87, respectively. If the yen extends its uptrend, it is likely to find resistance around 169.00 against the euro, 196.00 against the pound and 180.00 against the franc.

Against the U.S., the Australia, the New Zealand and the Canadian dollars, the yen advanced to 147.00, 95.59, 87.05 and 106.54 from Thursday's closing quotes of 147.68, 95.59, 87.44 and 106.91, respectively. The yen is likely to find resistance around 145.00 against the greenback, 94.00 against the aussie, 85.00 against the kiwi and 105.00 against the loonie.

Looking ahead, Canada manufacturing, new motor vehicle and wholesale sales data for June, U.S. retail sales data, export and import prices data, industrial and manufacturing sales data for July, U.S. University of Michigan's consumer sentiment for August and U.S. Baker Hughes oil rig count data are slated for release in the New York session.