The Yen is ready to put up with flat. Overview for 24.04.2020

On Friday afternoon, USDJPY continues trading sideways while investors are deciding on their mood.

The Japanese Yen is retreating against the USD on Friday, but the overall picture remains the same - a sideways channel. The current quote for the instrument is 107.66.

The latest statistics showed that the National Core CPI was 0.4% y/y in March after being 0.6% y/y in the previous month and matched market expectations. The indicator decline means that the efforts put by the Bank of Japan are not enough to help the Japanese inflation reach stability and the next step here might be expanding the QE program. However, technically this is hardly possible. Japan had been fighting the deflation for more than 15 years and finally won thanks to a multiphase QE program. But what if it doesn’t work anymore? It looks like the country has a dead-end ahead. 

The report was published shortly before the regulator’s next scheduled meeting, during which the BoJ is expected to worsen forecasts for the GDP and the entire economy, as well as announce a new package of measures to help businesses fight against the COVID-19 pandemic. 

The SPPI also decline in March, it was 1.6% y/y after being 2.1% y/y in February. The corporate services sector is also experiencing a lack of demand and trying to lower the prices in hopes to sell at least something, and that’s not a good signal. 

The All Industries Activity lost 0.6% m/m in March after adding 0.6% m/m the month and against the expected reading of -0.4% m/m. however, it’s quite logical given the pandemic.