USDJPY continues rising on Tuesday; demand for the Yen dropped.
On Tuesday, the Japanese Yen continues retreating against the USD. The current quote for the instrument is 107.71.
The statistics published in the morning showed that the Unemployment Rate in Japan went up from 2.6% in April to 2.9% in May against the expected reading of 2.8%. Well, sooner or later the Japanese labor market had to reflect problems in the sector and it seems like this moment has come. The current data is an excellent description of how much the Japanese economy is affected by the pandemic. It will require time to reach stability – the Bank of Japan implemented enough measures to pump the system with money and support the economy. However, it may take several months to see the results.
The Industrial Production, according to the preliminary report, lost 8.4% m/m in May after reducing by 9.8% m/m in April and against the expected reading of -5.6% m/m, which may have indicated that the worst period of crisis was over. But it’s not.
Market players continue monitoring the number of new COVID-19 cases and the possibility of the second wave but not so actively. In this light, demand for the Yen as a “safe haven” asset is decreasing. Along with the statistics, it makes a good reason for investors to sell the Yen and this is exactly what they are doing right now.
On top of that, the Yen has significantly strengthened recently and that’s not good for the Japanese budget and exporters, that’s why a little correction wouldn’t hurt.
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.