The USD/JPY pair was falling during the Asian trading session, but moved into the neutral zone by the middle of the day.
When there is no significant statistics, investors have to take into account any news that is published. Richter magnitude 7.3 earthquake in Japan this morning caused a tsunami with a tidal wave of 60 centimeters – smaller than it might have been. As a precaution, they stopped the Fukushima II NPP, which experienced the cooling system failure. However, later the plant restored its usual operation. The current quote for the USD/JPY pair is 110.81; there is no panic on the market.
Morning report on Countrywide Sales in Japan showed that the indicator reduced up to -3/9% m/m after losing 5.0% m/m in September. Considering MoM, it’s not so critical, but the numbers themselves are very weak.
Taking into account the connection between sales reports and inflation calculation parameters, one can expect the October report on the CPI to be at least disappointing. This, in its turn, will make the BoJ to change its future rhetoric relating to the inflation target.
We can also add the upcoming meeting of the USA Fed in December here. The wider the difference between interest rates, the worse the situation for the Japanese economy due to the capital outflow. However, it might trigger another wave of the Yen weakening, which is good for exporters.
RoboForex Analytical Department
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