🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

USD/JPY: Japanese Yen Jumpy as Japan’s Core CPI Eases

Published 04/19/2024, 08:14 AM

The Japanese yen showed some promise earlier, gaining as much as 0.48% against the US dollar as it rose to 153.59. However, it has pared those gains and is trading in Europe at 154.58, down 0.04%.

Japan’s core CPI falls to 2.6%

Japan’s nationwide CPI, which excludes fresh food, rose 2.6% y/y in March, down from 2.8% in February but higher than the market estimate of 2.7%. Core CPI has now exceeded the Bank of Japan’s 2% target for 24 consecutive months. The deceleration was driven by a decrease in food inflation but the yen’s weakness prevented a sharper drop in inflation.

The “core-core” CPI reading, which excludes fresh food and energy, dropped from 3.2% to 2.9% in March, below the forecast of 3%. This marked the first time that the index has fallen below 3% since November 2022.

While consumer inflation continues to slow, the Bank of Japan is more focused on services inflation, as it believes that services inflation together with higher wage growth are the recipe to ensuring that inflation remains sustainable at the 2% target.

The yen is down almost 10% since the start of the year and the sharp depreciation in such a short period has Tokyo concerned. The Ministry of Finance last intervened in the currency markets in late 2022 when the yen traded around 152. With the yen falling this week to 154.78, a 34-year old low, the markets are on alert for the possibility of another intervention.

The weak yen could also have a significant impact on rate policy. On Thursday, BoJ Governor Kazuo Ueda said that the Bank might raise interest rates again if the yen’s decline led to a significant rise in inflation. The BoJ lifted rates out of negative policy in March but the yen has weakened since then.USD/JPY-4-Hour Chart

USD/JPY Technical

  • USD/JPY tested resistance at 154.43 earlier. Above, there is resistance at 154.71
  • There is support at 154.11 and 153.83

Original Post

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.