Economic Data Doesn’t Make Yen Move

The Japanese yen did not move far following the release of macroeconomic data from Japan and the Summary of Opinions at the central bank’s January policy meeting.

The Bank of Japan demonstrated a relatively positive view on the Japanese economy, saying:


Since the second half of 2016, Japan’s economic recovery has strengthened. Positive synergy effects are being produced by improvement in overseas economies, economic stimulus measures by the government, and enhanced monetary easing.

At the same time, the document mentioned risks associated with European elections and policies of the new US administration:

Although overseas economies have turned to a moderate recovery, uncertainties are likely to persist, such as the economic policy of the new U.S. administration and its impacts on emerging economies, as well as national elections to be held in European countries.

The bank also expressed disappointment by the elusiveness of the 2% inflation target:

It is disappointing that the underlying trend in the monthly CPI inflation rate has been more or less flat, despite an improvement in economic developments. I believe that the inflation rate will remain largely below 2 percent during the projection period of the Outlook Report.

Meanwhile, lending by banks increased by 2.5% in January from the previous year, missing the consensus estimate of 2.7% and slowing from the previous month’s rate of growth of 2.6%. The current account shrank from ¥1.8 trillion to ¥1.67 trillion in December (seasonally adjusted), also missing expectations.

USD/JPY traded at 112.15 as of 1:55 GMT today after opening at 112.38. GBP/JPY slipped from 140.53 to 140.17. CHF/JPY was at about 112.47 after it opened at 112.61.

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