- The EUR/JPY advances with the inflation data of Japan at the Center for Care.
- Germany prepares for the publication of retail sales data on Friday, which will be published on Friday.
- Both data points can provide an additional catalyst while the operators remain focused on the next movement of the ECB and BOJ.
The euro (EUR) is strengthening in front of the Japanese Yen (JPY) of sure refuge on Thursday, before the next inflation data in Japan and the retail sales data of Germany. At the time of writing, the par quotes 163.83, 0.17% more in the day.
The approach in Japan on Thursday is in the next publication of the Tokyo Consumer Price Index (CPI) at 23:30 GMT, which will shed light on the rhythm of inflation. In April, inflation rose to 3.5% year -on -year, above the 2% target of the Bank of Japan (BOJ).
Meanwhile, the CPI excluding food and energy stood at 2%. With the Bank of Japan recently adopting a more Hawkish tone, a higher fact could increase the possibility that the BOJ moves away from its position of accommodating monetary policy.
In Europe, the publication of Germany retail sales data on Friday will probably provide an additional catalyst for the euro. It is expected that the largest economy in Europe shows that sales fell to 1.8% year -on -year in April, compared to 2.2% in March.
If retail sales turn out to be weaker than expected, this could solidify the expectations that the European Central Bank (ECB) will cut rates in June, with the possibility of additional relief at the July meeting. Meanwhile, a Reuters survey recently revealed that 70% of economists anticipate that the European Central Bank will pause its flexibility cycle after June. If data publications deviate from expectations, EUR/JPY could face additional pressure.
And in Japanese faqs
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
