JPY: Slower inflation delays JPY gains – ING
|The Japanese Yen (JPY) has been the only G10 currency losing against the dollar since the start of June, with the key driver being a dovish reassessment of Bank of Japan rate expectations after the latest meeting, ING's FX analyst Francesco Pesole notes.
Yen remains broadly attractive
"Tokyo’s June CPI data released this morning carried the potential for a revamp in hawkish bets, but the print was softer than expected, at 3.1% for both core and headline inflation versus the expected 3.1%."
"While the figures are still above the BoJ’s supposed tolerance level, they mark a potential inflection point that endorses a more cautious approach to monetary tightening. Retail sales figures for May also showed a MoM contraction."
"The Yen remains, however, broadly attractive in our view. Our model shows USD/JPY is now trading below its near-term fair value of 144.0, and the upcoming risk of tariff-related turmoil in July, plus limited room for further dovish repricing in BoJ expectations, suggest a retest of early-June 142.4 lows looks very much possible."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.