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28 Mar 2014
USD/JPY indifferent ater CPI data - BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, oberved the USD/JPY remained indifferent post-CPI data.
Key Quotes
"The investor concerns over the Ukraine and Crimea seem distant now while concerns over growth in China also appear to have receded somewhat helping to improve sentiment in Asia as well. The improved sentiment is undermining the dollar both in Asia and LATAM while remaining broadly stable versus the majors."
"Data today from Japan offered no catalyst for volatility in USD/JPY. The core annual inflation rate remained unchanged as expected at 1.3% in February while the Tokyo measure increased from 0.9% to 1.0%."
"The sign of stability in inflation does reinforce the markets’ expectation that the BOJ’s target of reaching 2.0% will prove impossible. Imported goods prices have a disinflationary phase ahead now given the annual rate of change in USD/JPY is falling back toward zero percent."
"In fact this is already happening with the petroleum products category in the CPI breakdown today showing the annual rate slowing from 6.2% in January to 3.0% in February. The overall energy category on an annual basis declined from 6.9% in January to 5.8% in February."
"So in fact given the stability in the overall annual rate there has obviously been some upward pressure on prices in other areas of CPI to offset the disinflation in energy. Whether this can continue over the coming months will be key to knowing whether broader inflationary pressures are building in the Japanese economy. The government did state that 290 categories within CPI increased in price, up from 279 in January – evidence that price pressures are broadening."
Key Quotes
"The investor concerns over the Ukraine and Crimea seem distant now while concerns over growth in China also appear to have receded somewhat helping to improve sentiment in Asia as well. The improved sentiment is undermining the dollar both in Asia and LATAM while remaining broadly stable versus the majors."
"Data today from Japan offered no catalyst for volatility in USD/JPY. The core annual inflation rate remained unchanged as expected at 1.3% in February while the Tokyo measure increased from 0.9% to 1.0%."
"The sign of stability in inflation does reinforce the markets’ expectation that the BOJ’s target of reaching 2.0% will prove impossible. Imported goods prices have a disinflationary phase ahead now given the annual rate of change in USD/JPY is falling back toward zero percent."
"In fact this is already happening with the petroleum products category in the CPI breakdown today showing the annual rate slowing from 6.2% in January to 3.0% in February. The overall energy category on an annual basis declined from 6.9% in January to 5.8% in February."
"So in fact given the stability in the overall annual rate there has obviously been some upward pressure on prices in other areas of CPI to offset the disinflation in energy. Whether this can continue over the coming months will be key to knowing whether broader inflationary pressures are building in the Japanese economy. The government did state that 290 categories within CPI increased in price, up from 279 in January – evidence that price pressures are broadening."