Japanese Yen Soft After Data Suggests Economy Weakens

The Japanese yen was generally soft today, though the currency has trimmed losses against some of its rivals by now and even managed to gain on the euro, which itself was very vulnerable. Domestic macroeconomic data, which demonstrated weakening economic activity in Japan, was unfavorable to the yen.
The Statistics Bureau of Japan reported that the core Consumer Price Index rose 0.6% in June, year-on-year. While the increase matched analysts’ forecasts, it was a slowdown compared to the 0.8% rate of increase in May. Month-on-month, the index fell 0.1%, seasonally adjusted. Slowing inflation means the Bank of Japan has no reason to consider ending its quantitative easing program anytime soon.
The Ministry of Economy, Trade and Industry reported that the Indices of All Industry Activity rose 0.3% in May from the previous month. While the increase was within expectations as well, it was also a slowdown from the April increase of 0.8%.
USD/JPY climbed from 107.29 to 107.77 as of 16:07 GMT today. EUR/JPY traded at 120.92 after opening at 120.97 and rising to the daily high of 121.28. GBP/JPY edged up from 134.57 to 134.73 but retreated from the session maximum of 135.00.

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