The Yen is slowly retreating. Overview for 19.11.2021

After experiencing some significant fluctuations earlier this week, USDJPY is slowly growing. 

The Japanese Yen is slowly falling against the USD at the end of this trading week. The current quote for the instrument is 114.34.

According to the statistics published earlier today, the National Core CPI in Japan showed 0.1% y/y in October, the same as expected and previous readings. 

The Inflation Rate in the country also showed 0.1% y/y in October after being 0.2% y/y the month before. On MoM, the indicator lost 0.3%. 

As a result, we’ve seen no confirmation of the September readings, which were quite promising and showed the highest improvement since January 2021. It’s not surprising but Japan is now back to its usual situation – low inflation in YoY and deflation in MoM.

Deflation and low inflation are the key reasons for the Japanese regulator’s headache. The population doesn’t want to spend money without seeing any positive outlook on the country’s economy. The government “injects” a lot of money into the economy every month, but can’t handle low inflation.  

As a rule, the Yen doesn’t care about macroeconomic data, but inflation is too important to ignore. One may assume that today’s drop in the Yen is somehow connected with disastrous inflation readings.