The Japanese yen fell today as Japan’s producer prices dropped in April from a year ago, highlighting the problems that the central bank has in its battle with deflation. The currency trimmed its gains against some majors and actually gained against the euro but maintained losses versus the US dollar.
While the Corporate Goods Price Index showed a small increase by 0.1 percent in April from the previous month, the index dropped 2.1 percent on a year-over-year basis. Such drop was expected by analysts, but that doesn’t make the reading any less bad. The yen dropped after the report but attempted to gain ground as Haruhiko Kuroda, Bank of Japan Governor, hinted that he is not going to add more stimulus to the economy for now. Yet Kuroda also said in today’s speech that he does not rule out additional monetary accommodation in case of necessity:
If there are changes in the underlying trend in inflation and it is deemed necessary to take action in order to achieve 2 percent inflation, the Bank will make adjustments as appropriate without hesitation.
USD/JPY climbed from 119.14 to 119.84 as of 12:56 GMT today. EUR/JPY was up from 135.93 to 136.35 earlier today but fell to 135.83 as of now.
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