The USD/JPY pair is retreating on Friday, while investors are evaluating the statistics published today.
The Japanese Yen is strengthening a bit against the US Dollar on Friday. The current quote for the pair is 102.61. Excluding today’s trading session, the instrument was strengthening after the market’s interest in “safe haven” assets reduced.
According to today’s statistics, the inflation in Japan in May decreased by 0.4% y/y after reduction by 0.3% in May of 2015. It’s not a very pleasant signal to receive: the fact that financial efforts made by the Cabinet of Ministers and the Central Bank aren’t producing the required effect no more, may have other consequences. For example, that the BoJ will have to expand the motivation program in order to continue pushing the inflation towards stably positive area.
For instance, in Tokyo, the core inflation reduced by 0.5% - the CPI is a very significant indicator in this city. Household spending in May decreased by 1.1% y/y.
This is bad news. The good news is the employment market report, according to which, the unemployment rate in May was 3.2%, thus remained the same as the month before. Instead, the number of employed has increased significantly: the ratio between number of jobs and applicants was 1.34 and this is the best number since 1991.
Also, it became known that Tankan index, which monitors the sentiments of major manufacturers, in the second quarter remained at 6 points and didn’t change in comparison with the previous period. Stabilization of the indicator above 0 implies a positive dynamics, and this is a good signal.
In other words, today’s statistics was as complicated as possible. Probably, this is why the USD/JP pair is not too active: the market needs time to evaluate and analyze it.
RoboForex Analytical Department
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