​EBC Markets Briefing | Yen meanders on weak GDP report; JPMorgan saw sell-off

The yen looked wobbly on Wednesday after a sudden spill overnight, pressured by wide interest rate differentials between Japan and the rest of the world.

The BOJ is likely to raise its policy rate at its December meeting and the government is set to tolerate the decision, sources told Reuters. Governor Ueda said economy weathered US tariffs.

Japan's economy contracted faster than initially estimated in Q3, primarily due to new data dragging down capital spending figures, though economists said the blip is not enough to sway the central bank.

Looking ahead, economists said the world's fourth-largest economy is likely to return to growth in the next quarter, anchored by a slow recovery in private consumption, though geopolitical tensions loom large.

Beijing just upped the economic stakes with a new ban on all imports of Japanese seafood. Moody's Analytics economist warns that a sharp drop in Chinese travel to Japan would lower GDP by 0.2 ppts immediately.

Opinion polls suggest consumers are already fed up with inflation, reining in spending as a result. Takaichi's plan to hasten wage gains and cut taxes is likely to spook bond market already on edge.

The yen has failed to find a robust support, which bolsters the case for a repeat of late 2024. We see another leg lower following a short period of consolidation around the current level.

Asset recap

As of market close on 9 December, among EBC products, VanEck Junior Gold Miners ETF led gains. The latest WGC report says the gold market in 2026 depends on whether Trump's reflation policies will succeed.

JPMorgan executive Marianne Lake warned that costs at the bank would rise next year as competition in the credit card space and investments in AI drive higher spending at the firm.

The Hong Kong market extended losses as investors cautiously looked for clues on the Fed's policy path ahead. A set of survey data pointed to more economic slowdown in the country.

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