24 Jun 2013
Flash: Selling pressure builds for JPY – Deutsche Bank
FXstreet.com (New York) - According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Inflationary pressures in Japan are finally starting to materialize as many had originally feared.”
Inflation turned positive in the Tokyo area in May, and nationwide CPI is likely to follow soon – confirmation of this could come as early as Friday. This is 'imported inflation' of course on the back of a sharply weaker yen. Gasoline prices are already rising on this for example. The appearance of 'domestically generated' inflation would be a far healthier development.
Selling pressure to mount on JPY
However, “for now FX markets are not likely to care too much about the precise origins, and the appearance of inflation of any kind is likely to boost confidence in the Bank of Japan's policy agenda, adding to selling pressure on the yen.” the analysts add.
Inflation turned positive in the Tokyo area in May, and nationwide CPI is likely to follow soon – confirmation of this could come as early as Friday. This is 'imported inflation' of course on the back of a sharply weaker yen. Gasoline prices are already rising on this for example. The appearance of 'domestically generated' inflation would be a far healthier development.
Selling pressure to mount on JPY
However, “for now FX markets are not likely to care too much about the precise origins, and the appearance of inflation of any kind is likely to boost confidence in the Bank of Japan's policy agenda, adding to selling pressure on the yen.” the analysts add.