Yen Ignores Upbeat PPI as Brexit Worries Drive Price Action
- Better-than-expected Japanese PPI did not spur a response from the Yen
- PPI rose 0.6% m/m vs. 0.4% expected, the largest gain since May 2014
- Anti-risk flows seem to be in charge as “hard Brexit” fears grip markets
The Japanese Yen showed a mild reaction as PPI rose 0.6 percent month-on-month in December versus 0.4 percent expected and 0.4 percent month-on-month recorded in November. This figure not only beat economists’ expectations, it also marked the largest jump for Japan PPI since May 2014. The on-year wholesale deflation rate fell to -1.2 percent, the lowest since March 2015.
The Yen was looking elsewhere as the data crossed the wires, rising alongside the likewise anti-risk US Dollar as “hard Brexit” fears weighed on market-wide sentiment. In broader terms, the implications of this data on monetary policy are likely limited, with the BOJ seemingly steadfast in its dovish posture.
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