USD/JPY Rises as Japan GDP Contracts, Gold Finds Support at $2,560

USD/JPY advanced 0.4% to 156.20 following Japan's unexpected economic contraction, marking the first GDP decline after six consecutive quarters of growth. Japan's Q3 GDP fell 0.2% quarter-on-quarter, missing expectations of 0.2% growth and raising questions about Bank of Japan's tightening timeline. The Nikkei 225 dropped 1.2% on the news, while safe-haven gold found support at $2,560 per ounce. Dollar strength continued with the DXY index holding above 106.50, supported by resilient US economic data contrasting with Japan's weakness. Technical analysis shows USD/JPY targeting 157.00 resistance, with support established at 155.80. The GDP contraction may delay BOJ's normalization plans, potentially widening the US-Japan yield differential further and supporting continued yen weakness against the dollar in coming sessions.