Breaking: Japan’s GDP contracts 0.4% QoQ in Q3 2025 vs -0.6% expected

Market reaction to Japan’s GDP data

At the press time, USD/JPY trades 0.03% higher on the day at 154.57.

Japanese Yen Price Last 7 Days

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 7 days. Japanese Yen was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.56%	-0.16%	0.96%	-0.64%	-0.83%	-0.72%	-1.45%
EUR	0.56%		0.40%	1.62%	-0.09%	-0.27%	-0.15%	-0.90%
GBP	0.16%	-0.40%		1.22%	-0.49%	-0.67%	-0.55%	-1.29%
JPY	-0.96%	-1.62%	-1.22%		-1.67%	-1.85%	-1.76%	-2.47%
CAD	0.64%	0.09%	0.49%	1.67%		-0.20%	-0.10%	-0.81%
AUD	0.83%	0.27%	0.67%	1.85%	0.20%		0.11%	-0.62%
NZD	0.72%	0.15%	0.55%	1.76%	0.10%	-0.11%		-0.74%
CHF	1.45%	0.90%	1.29%	2.47%	0.81%	0.62%	0.74%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

This section was published at 22:28 GMT as a preview of Japan quarterly prelim GDP data.

Japan quarterly prelim GDP Overview

The Japan’s Cabinet Office will publish its data for the third quarter (Q3) at 23.50 GMT. Gross Domestic Product is estimated to show a contraction of 0.6% QoQ in the Q3, compared to an expansion of 0.5% in the previous reading. Japan’s GDP Annualized is projected to show a fall of 2.5% versus a rise of 2.2% prior.

The Gross Domestic Product is a measure of the total value of all goods and services produced in Japan during a given period. The GDP is considered as the main measure of Japan’s economic activity.

How could the Japan quarterly prelim GDP affect USD/JPY?

USD/JPY trades on a flat note on the day in the lead up to the Japan quarterly prelim GDP data. The pair steadies as traders weigh whether the US Federal Reserve (Fed) is likely to cut rates in December.

If data comes in better than expected, it could lift the Japanese Yen (JPY), with the first upside barrier seen at the November 13 high of 155.02. The next resistance level emerges at the February 3 high of 155.88, en route to the January 23 high of 156.75

To the downside, the November 10 low of 153.41 will offer some comfort to buyers. Extended losses could see a drop to the November 7 low of 152.82. The next contention level is located at the October 29 low of 151.54.

GDP FAQs

What is GDP and how is it recorded?

A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.

How does GDP influence currencies?

A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.

How does higher GDP impact the price of Gold?

When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.