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Forex Today: Japanese GDP Data Underwhelms

Japan’s Q4 GDP expanded only 0.1% YoY, well below the 0.4% consensus, nudging the economy away from a technical recession but dampening reflation hopes. The weak data erased much of the yen’s recent 3% rally sparked by the new government’s pro‑growth mandate. Consequently, market pricing for a Bank of Japan rate hike in March fell from 20% to roughly 10%, leaving the yen vulnerable. Meanwhile, the Australian dollar emerged as the day’s strongest currency, while broader equity markets remain modestly bullish but off recent peaks.