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Japanese Yen Shrugs at Unchanged Cabinet Report

Japanese Yen Shrugs at Unchanged Cabinet Report

David Cottle, Analyst


Talking Points:

  • The Japanese Cabinet Office released its monthly economic assessment later than usual on Thursday
  • The Yen barely moved after its publication
  • Markets await a key healthcare vote in the US later

The Japanese Yen rose just a little against the US Dollar on Thursday following the release of the government’s monthly economic assessment.

The Cabinet Office’s monthly economic report for March was broadly unchanged in tone and content from February’s edition (you can see the text here). As such it may have had little foreign exchange impact whenever it had been released but, in the event, it came out as the European session was getting under way and Tokyo markets were winding down.

The report said that Japan remains on the path of “moderate” economic recovery, with the employment and income situation “improving.” However, it acknowledged that consumer prices remain flat, and that attention must be paid to various uncertainties in overseas economies and “fluctuations in financial and capital markets.”

The government pledged once again to overcome deflation. Consumer prices are rising in Japan, but achingly slowly.

USD/JPY made new lows for the day following the publication of this report, but didn’t have to move far to do it, with markets essentially hunkered down for a key US healthcare vote in Congress. This is being seen as an important test of the legislative clout of President Donald Trump.

The pair slipped to 111.03 after the release, from 111.15 just before.

Focused Elsewhere: USD/JPY

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--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.