The Yen is looking strong. Overview for 24.06.2020

In the middle of the week, USDJPY is correcting upwards but the Yen is looking quite energetic. 

The Japanese Yen is slightly falling against the USD on Wednesday. The current quote for the instrument is 106.59.

The statistics published by Japan in the morning were rather minor and didn’t have any influence on the market. The SPPI remained unchanged at 0.8% y/y in May. It’s quite good for the overall inflation – at least, the indicator didn’t fall. 

In addition to that, the Bank of Japan revealed its forecasts on inflation and the GDP, which said that it would require some time to collect data showing the effect of stimulus measures. The Japanese regulator was absolutely right when it had an early edge in supporting the country’s economy but it’s important to define where it helped the most.  

The entire stimulus system implemented by the BoJ consists of three key pillars: asset purchase, optimization of lending schemes, and aid to the companies that faced plunging sales due to the pandemic. Taken together, they look quite aggressive but it couldn’t be any otherwise under the circumstances.

Several members of the regulator are still afraid that deflation may overwhelm Japan and the current stimulus is not enough. To avoid this, the government must provide more support to businesses and help to escape an avalanche of corporate bankruptcies.