USD/JPY: Japanese growth surprise risk – ING

ING's Chris Turner flags Japan as a potential positive growth surprise that could weigh on USD/JPY. Turner notes South Korea’s chip-led upswing and upgraded GDP forecasts as a template, with Japan supplying key manufacturing equipment and benefiting from loose fiscal policy.

Stronger Japan could hit USD/JPY

"We’re also watching Japan for signs that it could follow South Korea’s lead and deliver stronger growth."

"There, chip exports have benefited the broader economy and the Bank of Korea revised up this year’s GDP forecast to 3.3%, from 1.8% at the start of 2026."

"Japan supplies the manufacturing equipment and materials for chip production."

"Broader benefits to the economy from loose fiscal policy could see upside surprises to Japanese growth, tighter Bank of Japan policy and a much weaker USD/JPY."