FX.co ★ Japanese Yen Retreats on Soft GDP Print

The Japanese yen weakened to around 153 per dollar on Monday, giving back part of last week’s gains after Japan’s fourth-quarter 2025 growth data came in well below expectations. The economy expanded 0.1% quarter-on-quarter in Q4, rebounding from a 0.7% contraction in Q3 but missing consensus forecasts for a 0.4% increase. Consumer spending, the largest component of GDP, rose just 0.1%, underscoring subdued domestic demand as households continued to struggle with elevated inflation.

Prime Minister Sanae Takaichi recently reiterated her commitment to supporting growth through proactive fiscal measures following her landslide victory in the February 8 Lower House election. The yen had rallied nearly 3% last week—its strongest weekly performance since November 2024—on expectations that Takaichi’s expansionary fiscal plans could bolster growth without placing excessive strain on public finances. Expectations of further rate hikes by the Bank of Japan and concerns over potential currency intervention also provided support for the yen.