Yen steady ahead of BoJ Core CPI

The Japanese yen has started the week quietly and is trading slightly below the 115 line.

Investors eye Japanese inflation releases

The focus will be on Japanese inflation indicators in the coming week, with three events on the economic calendar. Like other major economies, Japan is dealing with a rise in inflation, although the pace has been much more moderate than what we’re seeing in the UK or the US. Inflation remains well below the Bank of Japan’s target of 2%, so there is no talk of raising interest rates in the near future.

The January reading of BoJ Core CPI, the central bank’s preferred inflation gauge, will be released on Tuesday. The indicator rose 0.9% y/y in December, up from 0.8% and its highest level since May 2016. On Friday, Tokyo Core CPI for February will be released. After a weak reading of 0.2% y/y in December, the indicator is expected to rise to 0.4%. 

The crisis brewing in Ukraine remains at a critical stage, as there have been further skirmishes between the Ukraine army and the pro-Russian separatists, with fears that Russia is deliberately creating these flare-ups in order to justify an invasion of Ukraine. Russia has amassed over one hundred thousand troops around the border with Ukraine, and could choose to invade at any time. However, there have been some diplomatic moves in the meantime, notably a possible summit between Presidents Biden and  Putin this week. Biden expressed his willingness to meet Putin if there was no invasion. We can expect a ping-pong reaction from the markets in the coming days, with market direction dependent to a large extent on what President Putin does next.

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USD/JPY Technical

  • 114.61 is under strong pressure in support. Below, there is support at 114.16
  • There is resistance at 115.68 and 116.30

 

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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