Japanese Yen Stays Weak After June Inflation Data
The Japanese Yen (JPY) didn’t move much on Friday and stayed close to its lowest level in over three months against the US Dollar (USD/JPY). This happened after Japan shared its latest CPI (Consumer Price Index) report, which showed that inflation is still low.
In June, Japan’s overall inflation stayed at 3.3%, the same as in May. The core CPI, which removes the cost of fresh food and energy, fell slightly to 3.4% from 3.7%. This means prices are not rising quickly, so the Bank of Japan (BoJ) is less likely to raise interest rates soon.
The market now believes the BoJ might not increase rates at all this year. This keeps pressure on the Japanese Yen, especially when the US dollar remains strong.
There’s also political uncertainty in Japan, with elections happening on July 20. Many think the ruling party could lose seats, which adds more risk to the JPY.
On the other side, Fed officials in the US have shared mixed views. Some hint at delayed rate cuts, which keeps the dollar firm and puts more pressure on the yen.
Impact:
The yen might stay weak unless inflation rises or Japan’s political outlook becomes clearer. Strong US data or delayed Fed rate cuts could push USD/JPY even higher.