Japanese yen weakened as Japan’s Weighted Median Inflation Index showed a slowing.

The Japanese Yen (JPY) fell after the Bank of Japan (BoJ) released new data on Tuesday showing that Japan’s Weighted Median Inflation Index, a key indicator of the country’s trend inflation, rose by 1.1% in April. This growth rate is slower than the 1.3% increase observed in March.

Japan’s Corporate Service Price Index increased by 2.8% year on year, the quickest pace since March 2015.

However, the pair rose throughout the early Asian hours, aided by Japan’s Corporate Service Price Index (CSPI). In April, the index rose by 2.8% year on year, exceeding estimates of 2.3% and marking the strongest pace of gain since March 2015.

The Japanese Yen may have received some support as a result of remarks made by Japan Finance Minister Shun’ichi Suzuki on Tuesday, which hinted at the possibility of verbal intervention. Suzuki stressed the necessity of currencies moving in a consistent manner that reflects fundamentals, noting that he closely monitors foreign currency (FX) movements. He did not, however, comment on whether Japan had intervened in the currency markets.

The drop in US Treasury yields weighed on the US Dollar.

The US Dollar (USD) is losing momentum as US Treasury yields fall. Traders will likely await the Federal Reserve’s favored measure of inflation, the Personal Consumption Expenditures (PCE) Price Index data, which is due on Friday. , to evaluate future US monetary policies.

Daily Market Movers: Japanese Yen extends advances following remarks from BoJ officials.

At the 2024 BOJ-IMES Conference on Tuesday, Cleveland Federal Reserve President Loretta Mester stressed the importance of FOMC announcements that provide a clear analysis of the present economic assessment, its impact on the forecast, and the related risks. She expects the Fed to examine improving communications as part of its next monetary policy framework review.
Meanwhile, Federal Reserve (Fed) Governor Michelle Bowman emphasized the importance of continuing to lower the size of the balance sheet in order to obtain adequate reserves as soon as feasible, especially while the economy continues strong. She stressed the need of notifying any changes to the run-off rate to ensure that they are It is evident that they do not represent a shift in the Fed’s monetary policy stance.
The Japanese yen strengthened following Bank of Japan officials’ comments on Monday. Governor Kazuo Ueda of the Bank of Japan stated that while progress has been achieved in moving away from zero and improving inflation expectations, they must be re-anchored, this time at the 2% target.
Furthermore, BoJ Deputy Governor Shinichi Uchida noted that they have returned to a traditional monetary policy framework to attain a 2% price stability target by adjusting the short-term policy rate. Uchida also stated that they have successfully navigated beyond the zero-lower bound.

Japanese Cabinet Office reported on Monday that the government’s economic outlook remained unchanged.

The Japanese Cabinet Office reported on Monday that the government’s economic outlook remained unchanged. for the third consecutive month in May. It stated that the Japanese economy is continuing to recover at a steady pace, despite recent signals of a slowdown in growth.
UoM 5-year Consumer Inflation Expectations fell marginally to 3.0%, below the expected 3.1%. Despite an upward revision to 69.1 from a preliminary reading of 67.4, the Consumer Sentiment Index remains at its lowest level in six months. These data are likely to have boosted investor optimism about the Federal Reserve’s prospective rate decreases.
Japan’s National Consumer Price Index (CPI) fell to 2.5% year on year in April from 2.7% the previous month, indicating the second straight month of deceleration but remaining over the Bank of Japan’s (BoJ) 2% objective. This consistent inflationary trend imposes Pressure on the central bank to consider policy tightening.

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