The Japanese yen rallied today as nation’s inflation accelerated, reducing incentive for the central bank to ease monetary policy and weaken the currency further.
The Japanese consumer price index rose 0.8 percent in August from a year ago, while analysts have expected it to increase at the July rate of 0.7 percent. Meanwhile, the Tokyo CPI rose 0.2 percent in September, slower than in August (0.4 percent) and less than was predicted (0.3 percent).
The yen was soft yesterday, but losses were limited. The Japanese government may reduce corporate tax to spur economic recovery. If it is the case, the Bank of Japan will likely not act in the near future.
USD/JPY fell from 98.95 to 98.71 as of 2:56 GMT today. EUR/JPY went down from 133.71 to 133.11 and GBP/JPY slid from 158.73 to 158.37.
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