The yen is tumbling after Japan's GDP miss

pulse

February 13, 2017 2:07 PM

The Japanese yen is down against the US dollar after a GDP miss.

The Japanese yen is weaker after a GDP miss.

The currency is down by 0.6% at 113.91 per dollar as of 8:46 a.m. ET.

Earlier, a preliminary estimate showed that the Japanese economy grew by 0.2% in the fourth quarter, below economists' expectations of 0.3%. This was the third consecutive quarter that growth slowed.

"Growth was not fast enough last quarter to reduce spare capacity any further, but the current level of the output gap remains consistent with stronger price pressures. The upshot is that monetary policy will remain on hold for a long time," wrote Marcel Thieliant, senior Japan economist at Capital Economics, in a note.

"Looking ahead, the current strength in labour income suggests that consumer spending will start to recover again soon," he added. "However, we expect the yen to weaken further towards 130 by the end of this year, which will result in a surge in prices of imported goods and undermine households’ purchasing power. We therefore expect private consumption to slow again next year."

As for the rest of the world, here's the scoreboard as of 8:55 a.m. ET: