USDJPY moved away from its multi-month highs but the “greenback” has an ace in the hole.
Early in another week of May, the Japanese Yen reached stability against the USD. The current quote for the instrument is 129.34.
The statistics published in the morning showed that the Producer Price Index in Japan leaped up 10.0% y/y in April after being 9.7% y/y in March and against the expected reading of 9.3% y/y.
It means that inflation in Japan is rising and the next CPI report will definitely confirm it. For Japan, deflation has been a major problem for many years. It’s quite clear that the prices are pressured by interruptions in deliveries and the energy price surge. However, even considering all this, the dynamics are pretty good.
The Machine Tool Orders gained 25.0% y/y in April after adding 30.0% y/y the month before.
The good news is that the industrial sector continues operating very actively, providing an impulse to other industries and helping the economy to keep afloat.
The pause in the Yen devaluation might be quite long – market players need time to assess risks without buying the “greenback”.
