The bulls of the Japanese Yen regain control as the strong IPC of Tokyo reaffirms the row bets of the Boj

• The Japanese Yen attracts buyers for the second consecutive day in the midst of a combination of support factors.
• A Federal Court of Appeals restores Trump’s tariffs and revives the demand for safe refuge.
• Japan’s optimistic data reaffirmed the bets for more increases in Boj’s rates this year and provide additional support to the JPY.

The Japanese Yen (JPY) attracts a strong monitoring purchase for the second consecutive day on Friday and recovers even more than a minimum of two weeks reached in front of his US counterpart the day before. The feeling of global risk suffered a blow after a Federal Court of Appeals on Thursday Pausara a recent decision to block the wide tariffs of US President Donald Trump. This is evident in a tone generally weaker around the markets of shares and helps to revive the demand for traditional assets of safe refuge, including JPY.

Meanwhile, the optimistic macroeconomic data of Japan published today, including the solid inflation data to the Tokyo consumer, support the case for more increases in interest rates by the Bank of Japan (BOJ) and provide additional support to the JPY. The US dollar (USD), on the other hand, is consolidated after the dramatic turn of the previous day in the midst of concerns about the worsening of the US fiscal situation and bets that the Federal Reserve (Fed) will remain in its relaxation bias. This contributes even more to the continuous fall of the USD/JPy torque.

Japanese yen receives global flight support and expectations of a hard line box

• A Federal Court of Appeals paused a separate trade court and restored the broad commercial tariffs of US President Donald Trump late on Thursday. This adds a layer of uncertainty in the markets and moderates the appetite of investors by more risky assets, which, in turn, benefits the Japanese and safe refuge.
• The Japan Statistics Office reported Friday that the general consumer price index (CPI) in Tokyo – the capital of Japan – rose 3.4% compared to the previous year in May, compared to 3.5% of the previous month. Meanwhile, an indicator that excludes volatile fresh foods reached a maximum of more than two years.
• In fact, the underlying IPC stood at 3.6% year -on -year after an increase of 3.4% in April and exceeded medium market forecasts of an increase of 3.5%. In addition, a separate index that eliminates the effects of fresh food prices and fuel costs increased 3.3% in May compared to May, after an increase of 3.1% recorded in April.
• Tokyo’s CPI has exceeded 2% of the Bank of Japan for three consecutive years and points to persistent food inflation. This will keep the Central Bank under pressure to increase rates even more, although uncertainty about US tariffs could force BOJ to maintain a waiting and see approach.
• Separate data showed that Japan industrial production contracted 0.9% in April, marking a reversal of a 0.2% increase in March. However, the contraction was less than anticipated. In addition, a survey revealed that manufacturers expect production to increase 9.0% in May and decrease 3.4% in June.
• In addition to this, Japan retail sales increased more than expected, 3.3% year -on -year in April, compared to 3.1% of the previous month. This adds to the expectations that significant salary increases will boost private consumption and support the case for a greater normalization of policy by the BOJ.
• From the US, the second estimate of the GDP of the first quarter published by the Office of Economic Analysis on Thursday showed that the economy contracted at an annualized rate of 0.2% during the January-March period. However, reading was better than the fall of 0.3% initially expected and the consensus prognosis.
• The US Department of Labor reported that the number of Americans who requested unemployment insurance for the first time, known as initial unemployment applications, increased to 240,000 for the week that ended on May 24. This marked a substantial increase with respect to the total revised of the previous week of 226,000.
• The market approach now moves towards the publication of the US Personal Consumption Expenditure Index (PCE). Crucial data will influence market expectations on the Fed Rate Cutting Trajectory, which, in turn, should provide a significant impulse to the US dollar and the USD/JPY.

The USD/JPY seems vulnerable to further extending the fall below the round figure of 144.00

From a technical perspective, the night failure near the level of fibonacci setback of 61.8% of the recent fall from the monthly peak and the subsequent fall favor the bassists of the USD/JPY. In addition, negative oscillators in daily/hour graphics suggest that the way of lower resistance for cash prices is down. Some continuation sales below the region of 143.45 will reaffirm the bearish perspective and drag to the torque towards the 143.00 mark. The descending trajectory could extend even more towards the intermediate support of 142.40 en route to the 142.10 zone, or the monthly minimum reached on Tuesday.

On the contrary, the 144,25-144.30 region now seems to act as an immediate obstacle, above which the USD/JPY torque could aspire to recover the psychological level of 145.00. A sustained strength beyond the latter should pave the way for a movement towards the next relevant obstacle near the horizontal zone of 145.65 en route to the round figure of 146.00 and the maximum night oscillation, around the region of 146.25-146.30.