Bank of Japan Hesitant on Self-Sustaining Recovery

The Japanese Central Bank mentioned in their November report for Economic and Financial Developments that it expects prices to slow their fall at the end of the year. Even with all the stimulus programs from the goverment the Bank acknowledges that business conditions will remain weak. Japan is an exporting nation and the weakening of the USD resulted in an adverse apreciation of the JPY which in turn has made Japanese export less attractive to foreign consumers.

“The year-on-year pace of decline in consumer prices is expected to moderate toward the year-end as the effects of the prices of petroleum products abate,” the bank said. It failed to mention that last week the domestic demand deflator, a key measure of deflation, dropped by 2.6 percent, its highest fall in more than half a century.

via Xinhua

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza