Japan's economy rebounded firmly by 0.5% in the second quarter after contracting 0.1% in the first, with economists forecasting quarterly growth of 0.6%.

On an annualized basis, the world’s third-largest economy grew 2.2% against 2.5% expected and a -0.5% contraction recorded in the previous quarter.

The country’s GDP deflator arrived at -0.4% YoY in Q2 vs. -0.2% expected and -0.5% prior.

Market reaction

In an immediate reaction to the Japanese GDP data, USD/JPY is trading at daily lows near 133.30, down 0.14% on the day.

Japan's yen rose around 1% against the dollar last week, posting its third weekly rise in four, amid expectations of a less aggressive Fed rate hike path after easing US inflation outlook.