USD/JPY jumps above 156.50 after Japanese GDP, eyes on US Retail Sales data

• USD/JPY trades in positive territory for the fifth straight day near 156.60 in Friday's early Asian session. 
• Japan's GDP rose 0.2% QoQ in Q3, as expected.
• Fed's Powell said strong US economic growth will allow the Fed to take its time on rate cuts. 

The USD/JPY pair extends the rally to around 156.60, the highest level since July 23 during the early Asian session on Friday. The upward movement of the pair is bolstered by the firmer US Dollar (USD) broadly. Traders brace for the US October Retail Sales, which is due later on Friday. 

The preliminary Japan's Gross Domestic Product (GDP) expanded by 0.2% QoQ in the third quarter (Q3) versus 0.5% prior, in line with the market consensus. The country's GDP Annualized grew 0.9% in Q3, above the market consensus of 0.7%, and slowed sharply from the 2.2% seen in Q2. The Japanese Yen remains weak in an immediate reaction to the GDP report. 

The Bank of Japan (BoJ) Governor Kazuo Ueda warned during the October monetary policy decision that the central bank would scrutinize income data for future policy decisions. The uncertainty surrounding the BoJ rate-hike plans is likely to weigh on the JPY against the Greenback in the near term.  However, the verbal intervention from Japanese authorities might help limit the JPY's losses. 

On the USD's front, Federal Reserve (Fed) Chair Jerome Powell noted on Thursday that strong US economic growth will allow policymakers to take their time in deciding about the size and the pace to cut interest rates. "The economy is not sending any signals that we need to be in a hurry to lower rates," said Powell. The cautious stance of Powell prompted traders to lower their expectations for a December rate cut, lifting the Greenback. 

Meanwhile, Richmond Fed President Thomas Barkin stated on Thursday that while the Fed has made strong progress so far, there's still more work to be done to keep the momentum going. The markets have priced in nearly 59.1% of the 25 basis points (bps) rate cut by the Fed at the December meeting, down from 75% last week, according to the CME FedWatch Tool.