Instead of slightly positive growth compared to the third quarter, the economy contracted again. This means that Japan has slipped into a technical recession in the second half of 2023, as the third quarter also saw negative growth, albeit on a much larger scale. On top of that, the Q3 numbers were revised down a bit more.

As the global economy weakens, the Japanese economy seems to also suffer, except that the BoJ now has much less room to cut interest rates than other central banks. This is not a good outlook for the Yen.

And the Japanese figures underscore another fact: the US economy is out of competition at the moment, i.e. we are seeing a significant slowdown in economic growth in almost all other countries, with US growth being the main standout. That, in turn, is a much better outlook for the US Dollar.