The Japanese yen was soft versus the majority of its most-traded peers today. Domestic macroeconomic data was mixed and Bank of Japan officials were sending somewhat confusing signals about monetary policy in the future.
The Statistics Bureau of Japan reported that household spending increased 4.0% in May over the year. Market participants were expecting about the same rate of growth as in April (1.3%).
Meanwhile, Japan’s Cabinet Office reported that the Leading Index slid from 95.9% in April to 95.2% in May, matching expectations.
BoJ Deputy Governor Masayoshi Amamiya told Reuters today that he thinks the Japanese economy is on track to achieve the central bank’s 2% inflation target:
For now, our baseline scenario is that Japanâs economy will continue to expand moderately and gradually push up inflation to our target.
But he also said that the central bank will not hesitate to implement additional monetary easing if necessary:
But there are various downside risks. If such risks hurt the economyâs momentum to achieve our price target, we wonât hesitate to consider easing more.
USD/JPY soared from 107.81 to 108.55 as of 16:56 GMT today. EUR/JPY edged up from 121.66 to 121.78, bouncing from the daily low of 121.27. GBP/JPY went up from 135.58 to 135.80.
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