Japan GDP contracted -1.3% qoq in Q1, slightly worse than expectation of -1.2% qoq. In annualized term, GDP contacted -5.1%, versus expectation of -4.6%. Looking at some details, capital expenditure dropped -1.4% qoq versus expectation of 1.1% qoq. External demand dropped -0.2% qoq, matched expectations. Private consumption dropped -1.4% qoq, better than expectation of -2.0% qoq. Price index dropped -0.2% yoy, below expectation of -0.1% yoy.
Yen continues to trade as one of the weakest for the month, along with Dollar. In particular, we’d like to point out that CHF/JPY’s medium term rally remains in force, which could give extra pressure to Yen. As long as 119.96 support holds, we’re expect the current rise from 106.71, as the third leg of the pattern from 101.66 (2016.06), to continue to 100% projection of 101.66 to 118.59 from 106.71 at 123.64.