Japanese Yen (JPY) Exchange Rate Advances Ahead of Inflation Figures
With Japan’s consumer price report expected to show that inflation in Tokyo accelerated at the most rapid rate for over twenty years, the Japanese Yen was able to consolidate and extend gains against the US Dollar.
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The Yen edged higher against almost all of its currency peers as investors bet that the Bank of Japan will hold off introducing additional stimulus as a result of the imminent inflation data.
One London-based currency strategist had this to say of potential BOJ policy; ‘The accumulation of recent comments from the Bank of Japan suggested that it is not about to ease policy further unless economic data warrants it. The Yen’s resilience this week is also probably flow driven.’
However, while the Yen gained on peers like the British Pound and US Dollar, it was little-changed against the Euro as the common currency was boosted by an unexpected increase in German business sentiment.
In other currency news, the New Zealand Dollar rallied in response to the Reserve Bank of New Zealand’s decision to introduce an interest rate increase while the Australian Dollar remained softer following this week’s disappointing Australian inflation data.
Later today the USD/JPY exchange rate pairing could fluctuate as a result of US durable goods orders data and initial jobless claims figures.
If US durable goods orders are shown to have increased by the 2.0 per cent expected in March following April’s 2.2 per cent increase, the US Dollar may recoup losses against the Yen.
During Australasian trading Japan’s consumer price index will be drawing the focus of investors, but the nation’s all industry activity index for February will also be of interest.
The report is expected to show a 0.7 per cent monthly decline following an increase of 1.0 per cent in January.
Before the weekend US Markit services and composite PMI are likely to affect the USD/JPY exchange rate, as is the University of Michigan confidence gauge for April.
The US Dollar is currently trading against the Yen in the region of 102.3500 and the Pound is currently trading against the Yen in the region of 171.9100.