Just when it appeared that the fear of the yen could be released, Japan has reported an increase in central inflation.
Data published early Friday showed that Japan’s basic inflation, which removes fresh food prices, increased by 3% in annual sliding in February, moderating compared to 3.2% of January but beating consensus forecasts for 2.9%. The head consumer price index spent 3.7% compared to 4%.
Overall, the two clues remained well above the bank’s inflation target of 2% of the bank, validating the declaration of victory of the chief of the central bank Haruhiko Kuroda during the decades of deflation. In particular, since November, the inflation of the head of Japan is warmer than that of the United States – almost 100 base (BPS) higher now.
Clubbing inflation, as well as the salary hikes of Shunto salary negotiations, have strengthened calls for boj level increases. In other words, a potential yen rally, known to destabilize risk assets, including cryptocurrencies, is back on the table.
During the editorial staff, the Dollar-Yen pair (USD / JPY) was negotiated at 149.22, having rebounded nearly 300 pips as a sign of weakness of the yen renewed since March 11, according to Data Source TradingView.
That said, the narrowing or decline in the yield of American bonds at 10 years old supports the strength of the yen. Japanese yields have increased through the curve, offering bull clues to the yen. During the editorial staff, the yield of 10 -year bonds in Japan was greater than 1.5%, and the yield at 30 years was greater than 2.5%, both at summits of several decades.
A renewed yen force could result in risk aversion, as we saw in August from last year.
