USD/JPY retreats to 147.50 as markets digest PM Ishiba's resignation

• The Yen retraced earlier losses and trades higher against a vulnerable US Dollar.
• Japanese PM Ishiba rattled markets by announcing his resignation on Monday.
• Ishiba's resignation shadowed the impact of a bright Japanese GDP report.
  

US Dollar’s upside attempts against the Japanese Yen have been capped right below 148.60, and the pair retreated to session lows at 147.50 as the Yen regained lost ground following Japanese Prime Minister Ishiba’s resignation.

Ishiba announced earlier on the day of his decision to step down, following the defeat in July’s elections. Ishiba´s resignation sent Japanese long-term yields higher and hammered the Yen, but the JPY has regained lost ground during the European session.

Japan's Q2 GDP growth beats expectations

Concerns about the political situation have shadowed the strong Japanese Gross Domestic Product figures seen in the Early Asian session, which provide further reasons for the Bank of Japan to hike interest rates at next week’s meeting.

Japanese economy grew at a 0.5% pace in the second quarter, and at a 2.2% annualized pace according to the latest GPO report. These figures beat expectations of 0.3% and 1% respectively, forecast by market analysts.

The US Dollar, on the other hand, remains vulnerable after Friday’s poor US Nonfarm Payrolls report. A weaker-than-expected job creation in August, coupled with a net employment loss in June and the increase in the Unemployment Rate, has paved the path for a Fed rate cut next week.