The Japanese yen was generally weak today following the release of monetary policy minutes. Positive macroeconomic data did not help the currency.
The Bank of Japan released today minutes of its July policy meeting. The notes mentioned uncertainties associated with the trade war between the US and China. One BoJ Board member stated:
If the Chinese yuan depreciated further, due mainly to concerns over the possible negative impact on the Chinese economy, there was a risk of this having a negative impact on investors’ sentiment regarding emerging markets in Asia.
As for Japan itself, policy makers admitted that inflation was rising not as fast as was expected:
These members, however, agreed that it would take more time than expected to achieve 2 percent inflation, and that the projected rates of increase in the CPI for the projection period presented in the July 2018 Outlook Report were lower compared to those in the April Outlook Report.
Released separately, the Services Producer Price Index showed growth of 1.3% in August from a year ago. Analysts had predicted the same 1.1% increase as in July.
USD/JPY was little changed at 112.77 as of 12:27 GMT today after rising to the daily high of 112.98 earlier. EUR/JPY gained from 132.47 to 132.83. GBP/JPY rose from 147.93 to 148.44.
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