Japanese Yen (JPY) is outperforming. Japan’s preliminary real GDP increased four ticks more than expected by 0.7% q/q in Q4 vs. 0.3% in Q3. But the details were unimpressive, BBH's FX analysts report.

Japan rate expectations are adjusted higher

"Net exports added 0.7pts to growth on slumping imports. The growth contributions from household spending and non-residential business investment were subdued at 0.1pts each while inventory destocking shaved -0.2pts from growth."

"Japan rate expectations adjusted higher to imply higher odds of a 1.25% Bank of Japan (BOJ) terminal rate over next two years vs. 1.00% previously. Japan’s January CPI print on Thursday will either reinforce a more aggressive BOJ normalization cycle or curtail current rate hike expectations."