The USD/JPY pair is gaining weight despite rather positive statistics from Japan.
The Japanese Yen is retreating on Tuesday against the US Dollar despite several macroeconomic reports published this morning, which are quite strong. The current quote for the instrument is 102.31.
Today’s statistics showed that retails sales in Japan in July reduced by only 0.2% y/y against the expected decrease by 0.9% y/y. the unemployment rate in July was 3.0% against the predicted number of 3.1%. Another report, which shows household spending in July, indicated the decrease by 0.5% y/y against the predicted number of -0.9% y/y.
In case of the first two reports, everything is more or less clear: when the employment market improves, consumer purchasing power grows, which, in its turn, increases retail sales. Household spending is not so obvious, although this indicator seems rather objective and considers the growth potential of Japan. Household spending remained negative, but in comparison with the previous month, the indicator improved. It means that Japan still hasn’t been able to make the country’s economy to grow quickly enough, but the rate of growth is efficient and is sure to pay off in the future.
One should also pay attention to the employment market numbers, which in this July were the lowest since May 1995. This is very good.
Nevertheless, the demand on the currency market is in the favor of the US Dollar so far. The main reason for this is the September meeting of the Fed: once again, investors believe that the American regulator will make a decisive move relating to the interest rate in early autumn.
RoboForex Analytical Department
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