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Japanese Yen News and Analysis
Month on month Japanese inflation rose at its fastest pace in 10 years. Extreme short yen positioning yes to be tested during thin, holiday affected trading. USD/JPY on track for a flat two-day period ahead of Thanksgiving weekend. Check out the analysis presented in this comprehensive education library for more information.
Japanese Inflation Accelerates at its Fastest Pace over the Last 10 Years
Japanese inflation (headline CPI) rose to 3.3% from the prior 3.0% for the month of September, while the global measure of core inflation (inflation minus volatile items like food and energy) dipped from 4.2% to 4%. However, the standout from the data was the month-on-month number which revealed a notable acceleration of inflation heading into the end of the year. The Bank of Japan Governor Kazuo Ueda has previously expressed that the board will have enough data on hand by year end to make a decision on potential policy normalization, in other words removing negative interest rates.
USD/JPY Gives Little Away, Testing Dynamic Resistance
USD/JPY came in flat yesterday and appears to be on track for a second day in a row of little change in the opening and closing price. The pair has rallied for the week and is on track for a weekly advance which appears to be capped around 150 once again. The 50-day simple moving average, which acted previously as dynamic support, has now switched to dynamic resistance and is keeping the pair contained. If US growth and inflation data next week registers disappointing numbers, we could see another drift lower.
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