There is evidence that the Japanese economy is on the upswing, and many people are crediting Abenomics with the fact that significant inflation might be coming to Japan for the first time in nearly 20 years.
The latest economic data indicates that core inflation in Japan has increased by 0.4 per cent. This is the fastest rate since November of 2008, when core inflation increased by 0.1 per cent. For the last two decades, Japan’s big worry has been deflation, and now there is hope that the economy is ready to improve.
Many are crediting the improvement to prime minister Shinzo Abe and his backing of aggressive easing policies by the Bank of Japan, along with other policies. The whole operation has been called Abenomics, and it is being hailed a success.
As a result of the inflationary news, the yen is gaining ground right now. Since the yen has lost so much since the beginning of the year, it is no surprise that the Asian currency is due for a rebound — especially if an improving economy means that the Bank of Japan will have to pull back some of its efforts.
At 17:06 GMT USD/JPY is down to 98.1000 from the open at 99.2865. EUR/JPY is down to 130.2355 from the open at 131.8250. GBP/JPY is down to 150.8810 from the open at 152.8250.
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