Japan Data Dump Dissected

Limited movement so far in the Asia-Pac session on Tuesday; JPY slightly softer, USD/JPY gaining around 3 pips. Data from Japan showed GDP fell less than expected, on an annualized basis Q1 GDP fell 3.9% against consensus for a 5.0% decline. Inventories were the accretive factor with private consumption falling faster than expected and business spending matching consensus. The current account balance narrowed more than expected as did the trade balance. Labour cash earnings were also positive, rising 1.6% against estimates of a 0.8% rise.

• AUD/USD is a handful of pips higher, ANZ weekly consumer confidence fell 0.6%. The decline was blamed on the extension of the lockdown to June 10 while a new strain is increasing concern the lockdown will be extended again. The inflation expectations subcomponent did creep higher.
• NZD/USD is 6 pips lower, participants in New Zealand return after a market holiday yesterday. The latest QV House Price Index "has shown a reduction in quarterly value growth from the previous month" for the first time since Jul 2020
• Offshore yuan is slightly weaker. The PBOC USD/CNY fix will be eyed today with expectations the central bank will push back against implied CNY strength as the greenback weakened again.
• GBP showing some weakness, there were reports in the broadsheets that the touted June 21 reopening date for the UK could be delayed by two weeks while there was also chatter of friction on UK/EU negotiations over Northern Ireland.