The Yen doesn’t want to retreat. Overview for 27.05.2016
27.05.2016
The USD/JPY pair is falling on Friday; the Japanese statistics was not strong.
The Japanese Yen is strengthening slowly on Friday against the US Dollar. The current quote for the pair is 109.63.
According to the statistics published today, the inflation in Japan in April added another 0.2% m/m, but on a year-on-year basis it yet reduced by 0.3%. The core CPI in Tokyo in April didn’t change on a month-on-month basis, but on a year-on-year basis it decreased by 0.6% against the predicted number of 0.4%. A bit later, the BoJ will publish its own inflation calculation, but the numbers are very unlikely to differ from the published ones a lot.
We can’t say that the statistics is very weak, but it’s not as positive as one expected. The up-to-date data on the inflation will bring a lot of pressure on the Bank of Japan during the next meeting, given that the results of the previous meeting, in April, disappointed investors. It looks like the time has come to expand the QE program and operate under new conditions in order not to miss everything that has already been achieved over the period of the ultra-soft monetary policy.
So, the April statistics on the inflation on a year-on-year basis get a bit weaker than it was in March and the Japanese authorities might again take up the question of the BoJ efficiency. Usually, the Yen benefits from any bad news because of the big number of speculative positions, but in this case, reactions may be very surprising.
RoboForex Analytical Department
The Japanese Yen is strengthening slowly on Friday against the US Dollar. The current quote for the pair is 109.63.
According to the statistics published today, the inflation in Japan in April added another 0.2% m/m, but on a year-on-year basis it yet reduced by 0.3%. The core CPI in Tokyo in April didn’t change on a month-on-month basis, but on a year-on-year basis it decreased by 0.6% against the predicted number of 0.4%. A bit later, the BoJ will publish its own inflation calculation, but the numbers are very unlikely to differ from the published ones a lot.
We can’t say that the statistics is very weak, but it’s not as positive as one expected. The up-to-date data on the inflation will bring a lot of pressure on the Bank of Japan during the next meeting, given that the results of the previous meeting, in April, disappointed investors. It looks like the time has come to expand the QE program and operate under new conditions in order not to miss everything that has already been achieved over the period of the ultra-soft monetary policy.
So, the April statistics on the inflation on a year-on-year basis get a bit weaker than it was in March and the Japanese authorities might again take up the question of the BoJ efficiency. Usually, the Yen benefits from any bad news because of the big number of speculative positions, but in this case, reactions may be very surprising.
RoboForex Analytical Department
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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.