The Yen remains under pressure. Overview for 10.02.2022

USDJPY has been rising for the third consecutive trading session; investors don’t need “safe haven” assets. 

The Japanese Yen continues falling against the USD. The current quote for the instrument is 115.77.

Today’s statistics showed that the PPI in Japan was 8.6% y/y in January, a bit worse than in December, but better than the expected reading of 8.2% y/y. 

The indicator is now at the highs of 1985 but the Bank of Japan isn’t expecting it to force any surges in inflation. The BoJ Governor said that such a possibility is rather unlikely.

The head of the Japanese regulator provided a lot of comments today about its monetary policy. For example, he said that the “soft” monetary policy may continue in the country longer than it was planned because of low inflation (the target remains at 2.0%). At the same time, the regulator mentioned the fact of salary growth as a basis for inflation boost. Another factor mentioned today implied that households can’t stand price surges. 

The BoJ is expecting the salary growth to boost eventually. The regulator believes that the time to discuss the revision of its “soft” monetary policy hasn’t come yet. 

The key aspect is that the BoJ thinks it’s inappropriate to use monetary steps to solve the problems of energy price fluctuations. Probably, other global regulators may “take a leaf” out of the BoJ’s book. 

The demand for the Yen is low because investors like risks and don’t need “safe haven” assets.