Japanese Jobless Rate and CPI Improves, USD/JPY Higher
THE TAKEAWAY:Japanese jobless rate and CPI improve > Showing signs that the Bank of Japan’s stimulus is working > Unlikely to have affected investor expectations for monetary policy because of recent BoJ rhetoric > Press briefing on sales tax ahead > USD/JPY Higher
The Japanese Yen traded lower against the US dollar as Japan released data showing signs that the Bank of Japan’s massive easing program is having its intended effect. In July, national CPI rose to 0.7 percent, the highest inflation reading since November 2008. In the same month, the labor market improved more than expected and reduced the jobless rate to its lowest level since October 2008 at 3.8 percent.
However, despite the pickup in price trends, the pair was little moved. This release likely had minimal effect on investor expectations for BoJ monetary policy as the central bank has pointed to holding off more monetary easing in the near term to let its current program run its course. As the Asian session opened, price action saw the Japanese Yen move lower against the US Dollar.
One key event investors will likely be looking toward to finish the week will likely be comments from Japan’s Economic Minister Akira Amari on Saturday. He will be briefing the press on the progress of the Japanese economic panels that have been meeting every day this week to discuss the effects a sales tax increase.
USD/JPY (5-Minute Chart)
Source: FXCM Marketscope
Jimmy Yang, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.