Japanese yen is under pressure of weak inflation data

• Basic consumer price index (CPI) from the Bank of Japan (y/y) is 0.5%, the forecast is 0.6%.

Data from the Bank of Japan on the consumer price index unexpectedly declined in May, thereby exacerbating concerns about the overall inflation report in Japan. In turn, this indicator has questioned the preservation of the upward dynamics of the last year.

Fig. 1. Japanese CPI

The subsequent speech of Deputy Bank of Japan Vakatabe only strengthened the pessimistic sentiment about the yen, he stated about the expediency of the super soft monetary policy of the Bank of Japan.

As a result, the Japanese yen weakens across the entire spectrum of the market, especially in cross-rates, but remains very restrained against the American. The resumption of the American can provoke the rapid growth of the pair USD/JPY.

Fig. 2. The graph of USD/JPY. Current price – 111.00

Also, read: “Japan’s Economy in Conditions of Continuous Ultra-Soft Monetary Policy” and “Japanese Yen (JPY) – Features of Cross-Rate Trading”.

Hanzenko Anton