Yen Drops After Inflation Data

Japanese yen is lower against its major counterparts following the release of the latest inflation data. The Japanese economy continues to struggle, and that means that policymakers are likely to continue to pursue a course that includes keeping the yen weak.

Prior to the release of Japanese inflation figures, the yen had been making some headway against its major counterparts. Yen had gained a little bit, but the release of the inflation figures changed everything.
The latest inflation figures for Japan show that inflation dropped to a low not seen in 10 months. The news indicates that the Japanese economy is still struggling. The result is that many expect that the Bank of Japan will have to return to monetary stimulus measures in order to keep the economy going. These measures will further weaken the yen, and Forex traders are anticipating that.
Even though BOJ governor Haruhiko Kuroda warned of a scenario like this, he also mentioned that he thought things would pick up by March. Many Forex traders and analysts are skeptical of this scenario, though.
At 10:39 GMT USD/JPY has gained to 108.9965 from the open at 108.7540. EUR/JPY is also higher, up to 138.8145 from the open at 138.6600. GBP/JPY is up to 177.9430 from the open at 177.4750.

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