It
was a subdued session in Asia. The USD strength seen on Thursday,
and lower ‘risk’, showed very little retracement at all. The US
is on holiday on Monday, and the bond market closes early on Friday
there ahead of it. It seems Asia traders decided to shut down
even earlier.
The
focus for the session here was on Japanese inflation data for April.
The CPI measures cooled for a second month in a row but all three of
the major measures remained above the Bank of Japan’s 2% target
level. While this is good news for the BOJ on the face of it, the
concern is that its still ‘cost-push’ inflation. While the yen
remains a weakling that might be here for some time to come. BOJ
policymakers are keen for inflation to transition into ‘demand-pull’
but sustainable domestic demand is a long time coming and consumption
levels remain weak.
ps.
If you are wondering about ‘cost-push’ and ‘demand-pull’ I
have a really quick explanation here (economics texts will offer more
if that’s what you are after).
USD/JPY
has not done a lot today. Its traded in a small range only straddling
157.00.
Across
other major FX its been small ranges also. Mainland
China and Hong Kong stocks are down again.
Read More: ForexLive Asia-Pacific FX news wrap: USD/JPY sitting just above 157.00