- The USD/JPY loses ground in the early Asian session on Friday.
- The Japanese CPI rose 3.6% year -on -year in March; The underlying IPC increased by 3.2%.
- The initial applications of unemployment subsidy in the US fell to the lowest level in two months.
The USD/JPY torque softens about 142.25 in a low volume session on Friday. The US dollar (USD) goes back to the Japanese Yen (JPY) amid concerns about the economic impact of tariffs.
The data published by the Japan Statistics Office on Friday showed that the National Consumer Price Index (CPI) increased 3.6% year -on -year in March, compared to the previous reading of 3.7%. Meanwhile, the national CPI excluding fresh foods stood at 3.2% year -on -year in March compared to the previous 3.0%. The figure was in line with the market consensus.
Finally, the IPC excluding fresh food and energy rose 2.9% year -on -year in March, compared to the previous reading of 2.6%. The Japanese Yen remains strong against the US dollar in an immediate reaction to Japan inflation data.
However, the bullish potential for the JPY could be limited since the officials of the Bank of Japan (BOJ) indicated a pause in the consideration of increases in interest rates, emphasizing the need to monitor uncertainties increased by the tariff measures of the US adequate, being duly aware of the growing uncertainties derived from the tariff measures of the US and other problems. ”
The joint of the Board, Junko Nakagawa, agreed with the opinion of UDA in separate comments, saying that it is necessary to monitor the developments with high surveillance. It is expected that the Minister of Finance of Japan, Katsunobu Kato, meets separately with the Treasury Secretary, Scott Besent, to continue the negotiations initiated by the main tariff negotiator of Prime Minister Shigeru Ihiba, Ryosei Akazawa. Investors will keep an eye on developments in the country’s specific commercial negotiations.
The US economic data on Thursday were mixed. The initial applications of unemployment subsidy in the US fell to the lowest level in two months, indicating a stable labor market. In addition, the Philadelphia Fed index decreased, breaking the estimates, a warning of the manufacturing sector.
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.
