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Yen Holds Steady Following Data Deluge; Traders Eye ECB Meeting

David Becker
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Yen Holds Steady Following Data Deluge; Traders Eye ECB Meeting

The EURJPY rebounded after pushing through support on Thursday, as the currency pair hit a 3-month low. In-line consumer price data, nor an unchanged unemployment rate did little to sway the currency pair. Personal Consumer Expenditures fell in April but this was expected following the April tax hikes. Price action remained stable below the 200-day moving average, with support seen near 1.3790 and then again at 1.36.

Japan overall household real personal consumption expenditures fell 4.6% in April (year over year) on a “real” or price adjusted basis after the 7.2% increase in March. Household spending picked-up going into the April tax hike, but fell off as the higher rate took effect during April.

The unemployment rate sat at 3.6% in April, unchanged from March. The job offers ratio rose to 1.08 in April from 1.07 in March. Industrial production expanded at a 2.4% year over year rate in April after the 2.6% year over year gain in March. Production fell 2.5% m/m in April, as expected, after the 0.7% gain in March.

Inflation was expected to rise in April ahead of the tax hike. Japan’s core CPI rose 3.2% year over year in April, as expected following the 1.3% year over year core (excludes fresh food only) gain in March. The “core-core” CPI (excludes both food and energy) rose 2.3% year over year in April after the 0.7% rise in March. Total CPI rose 3.4% year over year in April after the 1.6% year over year March expansion.

Tokyo core CPI expanded 2.8% year over year in May after a 2.7% rise in April. Tokyo “core-core” CPI revealed a 1.9% year over year gain in May after a 2.0% year over year increase in April. Tokyo total CPI rose 3.1% year over year in May following a 2.9% year over year growth rate in April. The surge in the growth rates of all the national core CPI measures during April was well anticipated given the April consumption tax hike.

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