The Japanese yen was trading either flat or slightly lower versus its most-trade rivals today as traders were cautious, waiting for the outcome of the meeting between the leaders of the United States and China at the Group of Twenty summit. There were plenty of macroeconomic reports released in Japan today. The Bank of Japan also released the Summary of Opinions at its latest monetary policy meeting.
The BoJ released today the Summary of Opinions at the last week’s monetary policy meeting. Overall, the central bank felt positive about the domestic economy:
Japan’s economy has been on a moderate expanding trend, with a virtuous cycle from income to spending operating, although exports and production have been affected by the slowdown in overseas economies. Going forward, it is likely to continue on a moderate expanding trend, despite being affected by the slowdown in overseas economies for the time being.
Inflation is expected to move closer to the bank’s 2% target:
The year-on-year rate of change in the consumer price index (CPI) is likely to increase gradually toward 2 percent, mainly on the back of the output gap remaining positive and medium- to long-term inflation expectations rising.
The outlook for the global economy was less rosy, though:
Risks concerning the global economy have been further tilted to the downside compared to the previous meeting. Intensified trade friction and heightened geopolitical tensions have resulted in a further deterioration in business sentiment.
As for specific issues the BoJ singled out, the most prominent of them were “the intensification in the trade friction between the United States and China and the possibility of a no-deal Brexit”.
As for today’s macroeconomic data, annual growth of the Tokyo core Consume Price Index slowed to 0.9% in June from 1.1% in May, below the forecast increase of 1.0%. The seasonally adjusted unemployment rate remained steady at 2.4% in May, as was expected. Industrial production climbed 2.3% in May from the previous month, exceeding the average forecast of a 0.7% increase and the 0.6% growth registered in April.
USD/JPY traded almost flat at 107.73 as of 13:29 GMT today after falling to the session minimum of 107.56 earlier. EUR/JPY traded at 122.63 after opening at 122.52 and falling to the daily low of 122.27. GBP/JPY gained from 136.53 to 136.84, bouncing from the session low of 136.25.
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