USDJPY confirms its descending tendency; the Yen remains strong.
The Japanese Yen continues strengthening against the USD despite the deflation threat. The current quote for the instrument is 108.75.
The statistics published today showed that the Core CPI in Japan was -0.1% y/y in April, the same as the month before, although it was expected to be -0.2% y/y.
However, another report is much worse – the CPI showed -0.4% y/y in April after being -0.2% y/y in March. On MoM, the situation is also rather sad: -0.4% against 0.2% over the same period of time.
The components of the report show that the key contributors to the decline were food prices, which are dragging the entire indicator down.
The preliminary report on the Manufacturing PMI showed 52.5 points in April after being 53.6 points the month before against the expected reading of 53.0 points. It’s no surprise, the indicator just confirms deflation – consumers are inactive and prevent businesses from ramping up production and spending extra. Everyone is “on standby” and it doesn’t help prices to grow.
The Yen is barely responding to the statistics and its current strengthening is mostly caused by the weak American currency.