The Japanese yen was little changed against the US dollar but gained on other major rivals today. That was a surprising performance as fundamentals did not look supportive to the currency.
The Bank of Japan left interest rates and the size of Japanese government bonds purchases unchanged at today’s meeting, as was widely expected. There was one dissenter who voted for increasing monetary easing.
The central bank also released its economic projections, upgrading growth forecast for this fiscal year from 1.4% to 1.6%. At the same time, the forecast for the increase of the Consumer Price Index was revised lower from 1.4% to 1.3%. Indeed, the BoJ said in the report that the CPI “has continued to show relatively weak developments.”
Talking about inflation, the Tokyo CPI rose 0.6% in April, while analysts had predicted the same 0.8% rate of growth as in March. In other news, retail sales rose 1.0% in March from a year ago, missing the analysts’ median projection of a 1.5% growth. The unemployment rate stayed at 2.5% last month, matching expectations. Industrial production was the only indicator that managed to surprise positively, rising 1.2% in March from February versus the average forecast of a 0.5% increase.
USD/JPY was little changed at 109.33 as of 10:15 GMT today. EUR/JPY slid from 132.29 to 132.08. GBP/JPY tumbled from 152.05 to 150.78.
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Japanese Yen Rallies Undisturbed by Detrimental Fundamentals
