The Japanese yen fell against its major peers during the Thursday’s trading session but managed to trim its losses by now and even erased them completely versus the US dollar.
Bank of Japan board member Yutaka Harada signaled today that the central bank may reduce buying of exchange-traded funds if inflation reaches the bank’s target of 2%:
The BOJ is buying ETFs to stimulate the economy and achieve its 2 percent inflation target. If achievement of the target comes into sight, the BOJ could of course reduce or stop ETF purchases.
With that said, he thought that the target is still far away, and therefore it is too early to discuss stimulus exit. Yet an expansion of stimulus is also unlikely as the current quantitative and qualitative easing program is “already sufficiently bold.”
As for today economic data, Japan’s retail sales rose 2.0% in May from a year ago. The reading failed to meet analysts’ projection of a 2.6% growth.
USD/JPY jumped from 112.30 to 112.92 intraday but backed off to trade at about 111.94 as of 17:44 GMT today. EUR/JPY was up from 127.74 to 128.82, the highest level since February 2016, before retreating to 128.04. GBP/JPY opened at 145.09, rallied to the daily high of 146.51, and pulled back to 145.52 later.
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