The Japanese yen rallied today after the release of Japan’s inflation data, though there were bad reports as well. Perhaps what was even more important, the resurging fears of trade wars resulted in more demand for safer currencies, like the yen.
Tokyo annual consumer inflation accelerated to 0.9% in August from 0.8% in July, whereas experts had expected it to stay unchanged. Meanwhile, the unemployment rate edged up from 2.4% to 2.5% in July unexpectedly. Industrial production declined 0.1% in July instead of rising 0.3% as analysts had predicted.
Usually, though, the yen pays more attention to the general market sentiment than to domestic reports. Today, the traders’ mood was sour due to returning fears of trade wars between the United States and their major trading partners — China and the European Union. The risk-negative sentiment boosted demand for the yen in its capacity as a safe haven.
USD/JPY fell from 110.95 to 110.79 as of 12:45 GMT today. EUR/JPY declined from 129.45 to 128.93, retreating from the daily high of 129.84. GBP/JPY dropped from 144.37 to 143.71.
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