Japanese Yen Lower After Soft Inflation Data
The Japanese Yen fell against the US Dollar in light Asian trading, as Japan’s consumer inflation came in flat, adding more pressure on the Bank of Japan to revise its current monetary policy.
In a report issued by the Statistics Bureau, official data showed on Thursday that Japan’s national core rate of consumer price inflation unexpectedly remained unchanged last month. Japan’s National Core CPI stayed at a seasonally adjusted figure of 0.0%, from the 0.0% recorded in the preceding month. This came after analysts had been expecting Japan’s National Core CPI to actually increase to 0.1% for last month.
The figures disappointed the markets with the Japanese yen falling 0.22% against its US counterpart, trading at 122.35, as low energy costs and weak consumer consumption stifled price growth in the world’s third largest economy.
The latest set of soft data released from Japan keeps the central bank under pressure to change its monetary policy, sometimes referred to as ‘Abenomics’ by adding further stimulus even though the Bank of Japan eased it’s policy just under two months ago.
The soft data emphasizes just how close the Japanese economy is to falling in recession with core consumer prices in Tokyo, regarded a leading indicator of nationwide prices, seeing their largest annual decline in March for nearly three years.
Many analysts now feel that the Bank of Japan will be forced to slash its inflationary forecasts and delay the timing for reaching its price target of 2 percent at a quarterly review of its projections scheduled in April.
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