Japan’s Aso: Cannot expect inflation to accelerate without strong consumer demand

Dhwani Mehta FXStreet

Japan’s Finance Minister Taro Aso is making some comments on the country’s inflation outlook while appreciating the Bank of Japan’s (BOJ) measures to ramp up price pressures.

Key quotes

Doubts pent up demand will surge after the state of emergency is lifted

Appreciate the Bank of Japan efforts to push inflation higher

Aware of opinions that monetary policy alone limited in accelerating inflation.

Joint efforts are needed between monetary and fiscal policies to boost inflation.

Market reaction

USD/JPY is flirting with two-month tops of 111.19, up 0.16% on the day, thanks to the ongoing rally in the US Treasury yields across the curve amid the Fed’s hawkish shift.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD flirts with 1.3500 as USD finds fresh demand

GBP/USD is flatlining near the 1.3500 level the second half of the day on Tuesday, facing some pressure from renewed US Dollar demand as a safe-haven amid surging Oil prices and inflationary concerns. The focus now remains on the Middle East headlines, with Wednesday's US CPI data approaching as this week's key risk event.

EUR/USD stays below 1.1550 amid US-Iran impasse

EUR/USD struggles to gain any meaningful traction on Tuesday and trades marginally lower on the day below 1.1550. Traders seem hesitant to place aggressive bets and opt to wait for further developments surrounding the Middle East crisis and this week's release of the latest US inflation figures.

Gold off two-month highs, back below $4,400 amid surging Oil prices

Gold retreats from its highest level since June 5 at $4,435, touched earlier this Tuesday, and slides back below the $4,400 mark in European trading. Surging Oil prices, amid the US-Iran impasse on talks to reopen the Strait of Hormuz, rekindled inflation concerns, lending support to the US DOllar at the expense of the non-yielding bullion.

Crypto Today: Bitcoin and Ethereum consolidate, XRP dips as optimism for a US-Iran deal fades

Bitcoin (BTC) maintains a neutral outlook on Tuesday while testing support at $64,000. Investors appear to be sitting on the fence, awaiting a catalyst for a breakout above $65,000.

The inflation narrative is still way more important than the employment story

Core bonds sold off yesterday with the belly of the curve slightly underperforming in the US while European curves showed more of a bear flattening. Daily changes on the US curve varied between +4.7 bps (2-yr) and +6.4 bps (7-yr).

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.