Yen Slips as Japan Slides into Deflation

The Japanese yen was soft today after data showed that Japan slipped back into deflation, giving incentive for the Bank of Japan to expand the already extensive monetary stimulus.
Data released during the Asian trading session showed that both Tokyo core CPI (for September) and national core CPI (for August) fell. While the indicators were in line with experts’ forecast, they were still not good. And this means that the BoJ may have no choice but to stimulate the struggling economy yet again — not a good prospect for the yen.
USD/JPY rose from 120.06 to 120.84 as of 17:35 GMT today, touching the daily high of 121.22 — the highest since September 10. EUR/JPY was up from 134.82 to 135.07, bouncing from the daily low of 134.10.

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