On the back of weak GDP data, the USD/JPY reclaims a three-week high of 115.90

The USD/JPY pair has seen a juggernaut rally from its March 4 low of 114.65 to reclaim its three-week-old resistance at 115.90. The pair has extended its rally after Japan’s Gross Domestic Product (GDP) figures came in below expectations. Japan’s quarterly GDP came in at 1.1 percent, lower than the street estimates and previous print of 1.4 percent and 1.3 percent, respectively, while the yearly GDP figures fell dramatically to 4.6 percent, down from the market consensus of 5.6 percent and 5.4 percent. This has supported the US dollar against the Japanese yen.

On the geopolitical front, Ukraine President Volodymyr Zelenskyy signalled a truce by confirming the withdrawal of Ukraine’s NATO membership application. However, Ukraine’s intention to join the European Union (EU) remains intact, which may prevent Moscow from confirming a ceasefire. Despite the fact that the headline has restored some optimism in the stock market, risk-sensitive currencies continue to underperform against the mighty greenback. Meanwhile, the US dollar index (DXY) has remained in a narrow range of 98.99-99.14 during the Asian session. The DXY is expected to perform poorly because market participants are concerned about Thursday’s US Consumer Price Index (CPI) figures.