The yen has returned to devaluation. Overview for 18.05.2023

In the pair with the US Dollar, the Japanese Yen has returned to local lows after a brief pause. The current USDJPY quote is 137.62.

On the one hand, the JPY is under pressure from the strong US dollar. The market is avoiding risks due to the lack of consensus on the US government debt. The USD is in a favourable position here. On the other hand, investors have all but given up hope that the Bank of Japan will come closer to a decision to cancel its ultra-soft monetary strategy.

The yen returns to devaluating steadily and surely: a correction usually lasts for a couple of weeks after which the market sells the JPY.

The macroeconomic calendar in Asia is empty today. On Friday, however, the Japanese core inflation report for March (previously 3.1% y/y) and the tertiary services business activity index are worth a look.