The Yen to dollar rate has been extremely volatile for the past month, with steep drops interspersed with robust buying activity. Even with this volatility, the overall bullish trend continues for the JPY, supported by economic indications from Japan like the ones we have seen earlier this week that point to a slowdown of the country’s economy, or today’s fall in CPI inflation.

USD/JPY tumbled more than 10 cents lower after the intervention buy Japanese Authorities, but it didn’t stay down for long and the USD/JPY exchange rate has risen above 157 once more, suggesting that the USD is gaining ground against the JPY. The unexpected -2.4% decrease for April in the Tertiary Industry Activity report, released on Monday, brought attention to the difficulties facing the Japanese economy. The poor data highlights Japan’s economic difficulties, which further strengthens the bullish bias for USD/JPY.

USD/JPY Chart Daily – MAs Continue to Support the Uptrend

The Japan National Core CPI Inflation Report released today revealed yet another decrease. These statistics are significant because they shed additional light on Japan’s economic situation. A sustained downturn in inflation supports the present upward trend in the USD/JPY pair.

Japan National Core CPI Inflation Report – April 2024

Japanese Inflation Overview:

• National Core CPI (Excluding Food) for April: Registered a decline to 2.2%, aligning with market expectations.
• Headline CPI (Consumer Price Index): Declined to 2.5% in April from 2.7% in March.
• Core CPI (Excluding Food and Energy): Recorded a decrease to 2.4% in April from 2.9% in March.

Analysis:

• National Core CPI (Excluding Food): Despite meeting expectations, the slight decline suggests a moderation in inflationary pressures excluding food items.
• Headline CPI: The drop in the headline CPI indicates a broader softening in consumer prices, influenced by factors such as subdued energy prices.
• Core CPI (Excluding Food and Energy): The decrease in core CPI points to a more moderate inflationary environment when volatile food and energy components are excluded.

USD/JPY Live Chart