HomeContributorsFundamental AnalysisYen Trading Sideways, Japanese Inflation Report Next

Yen Trading Sideways, Japanese Inflation Report Next

USD/JPY is showing little movement in the Thursday session. In North American trade, the pair is trading at 112.17, down 0.09% on the day. In economic news, U.S manufacturing and employment reports beat expectations. In Japan, Japanese National Core CPI is expected to tick up to 0.9%. As well, Flash Manufacturing PMI is forecast to improve to 53.1 points.

At the BoJ policy meeting this week, policymakers held its short-term interest rate target at -0.1 percent and a pledge to guide 10-year government bond yields around zero percent. The BoJ also maintained a pledge to keep interest rates extremely low for an extended period. The Bank sounded optimistic in its rate statement, noting that the economy was “expanding moderately”.

After a brief respite, the US-China trade spat ratcheted upwards this week. Following weeks of speculation, U.S President Trump announced 10% tariffs on some $200 billion worth of Chinese goods. Only this time, investors didn’t panic and the Japanese yen and other currencies have held their own against the greenback. Investors appeared to have been ready for a move by Trump, and may be sighing in relief that the tariff was set at 10% rather than at 25%. One senior economist summed up Trump’s most recent salvo as “bad but manageable”. However, if the Chinese do indeed retaliate and the U.S takes further measures, this would likely shake up the currency markets and boost the U.S dollar.

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