The Yen is attacking. Overview for 28.10.2021

USDJPY is back to falling after a short pause; investors remain cautious. 

The Japanese Yen is strengthening against the USD on Thursday. the current quote for the instrument is 113.63.

On one hand, market players may require “safe haven” assets during downtimes, and the Yen is a perfect fit for that. On the other hand, the Yen always barely reacts to the statistics but might have responded to the Bank of Japan meeting results. 

So, after its October session, the Japanese regulator left all parameters of its monetary policy intact: the benchmark interest rate is -0.1%, the 10-year bond yield target level also remained the same.

At the same time, the regulator revised its stance on the key economic outlook for this fiscal year. For example, inflation in the country is now expected to be 0% in 2021-2022 against the previous estimate of 0.6%. In 2022-2023, the indicator may show 0.9%, the same as expected before. The real GDP this year might be 3.4%, which is below the July estimate of 3.8%. in 2022-2023, the country’s economy may expand by 2.9% against the previous estimate of 2.7%. 

As the coronavirus pandemic is retreating, the Japanese economy will boost its recovery, as well as the CPI. However, one shouldn’t exclude any unexpected consequences the pandemic may have on the Japanese economy, which remains in dire straits. Still, the current trend is quite positive although rather slow.