The Yen has corrected. Overview for 22.11.2019

On Friday, USDJPY is slowly growing; the Yen paid no attention to the statistics on inflation. 

The Japanese Yen is retreating a little bit against the USD at the end of the week. The current quote for the instrument is 108.63.

Demand for the Yen is somehow reducing due to some balance in the US-China trade talks. Nothing in particular, but investors calmed down. 

In the morning, Japan reported on inflation in October. The National Core CPI added 0.4% y/y after showing +0.3% y/y in September. The Inflation Rate Ex-Food and Energy expanded by 0.7% y/y, which is more than the month before (+0.5% y/y). 

The components of the report show that the furniture and household utensils added 4.2%, while clothes & footwear showed +1.2%. At the same time, electricity lost 1.0%, gas 0.4%, transportation & communication 1.0%, education 7.8%, and miscellaneous goods & services dropped by 2.9%.

Everything would be fine if it weren't for understanding that the inflation surge is extremely temporary: people were buying everything that could become much more expensive than usual before the VAT increase, and that can be clearly seen in the components. Prices will stop rising as early as in November, thus putting pressure on the country’s inflation readings.