USD/JPY surpasses 135.00 firmly on steady Japan Inflation data
- USD/JPY has refreshed its day’s high at 135.14 on unchanged Japan’s Inflation.
- The overall inflation and core CPI have landed at 2.5% and 0.8% respectively.
- The DXY is performing lackluster as investors have shifted their focus to the US Durable Goods Orders.
The USD/JPY pair has rebounded strongly and has crossed the round-level resistance of 135.00 as the release of the Japanese inflation has brought some support to the counter. The major has faced offers marginally around 135.00 on unchanged Japan’s Inflation figures. The annual Consumer Price Index (CPI) has remained flat at 2.5%. Also, the core CPI displayed no deviation and landed at 0.8%.
In comparison with the estimates, the released data looks more promising for the Japanese economy. The core CPI remained steady at 0.8%, which indicates that the price rise in goods other than food and oil is sustaining. The Japanese economy is facing the headwinds of the inability to sustain the overall demand. Now, sustainability in the core CPI figures will support the Bank of Japan (BOJ) to achieve its inflation target.
Also, a stable plain vanilla CPI at 2.5% indicates that there has been no impact of costly fossil fuels and food prices in May. So, the unavailability of the cost-push inflation effect in May will be music to the ears for BOJ Haruhiko Kuroda and its co.
No doubt, the ultra-loose monetary policy by the BOJ will remain intact till they manage to bring a significant jump in demand-pull inflation.
On the dollar front, the US dollar index (DXY) is facing some offers while attempting to kiss the critical hurdle of 104.50. Going forward, investors’ focus will remain on the US Durable Goods Orders, which are expected to improve to 0.6% from the prior print of 0.5%.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
