Japanese Yen (JPY) Exchange Rate at Three-Month High against US Dollar
On Tuesday the Japanese Yen achieved a three-month high against its the US Dollar thanks to ongoing risk aversion and a lack of significant US data.
If you're looking to make an international money transfer, we recommend TorFX.
The Asian asset broadly strengthened as investors flocked to it in the face of violence in Ukraine, Vietnam and Thailand.
Fears of the global economic recovery being impeded by weakness in regions like China and the Eurozone also bolstered the Yen.
Overnight, several economic reports for Japan were released.
Japan’s all industry activity index climbed by 1.5 per cent in March, month-on-month, wiping out February’s 1.1 per cent decline. An increase of 1.6 per cent had been expected.
The nation’s coincident index advanced from 112.9 to 114.5 in March while the leasing index slipped slightly from 108.7 to 107.1.
Nationwide department store sales were down by 12.0 last month following the 25.4 per cent surge recorded in March.
Finally, Japan’s machine tool orders climbed by 48.7 per cent in April year-on-year – up from a gain of 41.8 per cent in March but just below the estimated 48.8 increase.
The Yen’s bullish relationship with the US Dollar was also enabled by the fact that investors are expecting the Federal Open Market Committee meeting minutes (due out tomorrow) to be dovish in tone.
However, the Yen put in a mixed performance against the Pound on Tuesday as investors digested the UK’s consumer price inflation data.
The UK consumer price index increased by 0.4 per cent in April on the month and was up 1.8 per cent on the year.
Economists had anticipated a monthly increase of 0.3 per cent and an annual gain of 1.7 per cent.
The stronger-than-forecast gain was largely due to higher travelling expenses as a result of the Easter holidays.
As this result takes inflation closer to the Bank of England’s 2 per cent target it adds to the case for the central bank introducing an interest rate increase sooner rather than later.
The Pound was consequently supported by the report.
Core consumer price inflation rose by 2.0 per cent.
However, the nation’s non-seasonally adjusted producer price index stagnated in April while the retail price index climbed by 0.4 per cent, less than the 0.5 per cent gain anticipated.
Overnight, volatility in the GBP/JPY pairing could be occasioned by the Bank of Japan’s monetary base target report and press conference.
Investors will also be focusing on the release of minutes from the Bank of England’s latest policy meeting and UK retail sales figures.
The US Dollar is currently trading against the Japanese Yen in the region of 101.400 and the Pound is trading against the Yen in the region of 170.5920