News Column

Yen Rises As Japan's Inflation Advances

June 26, 2014



CANBERA (Alliance News) - The Japanese yen strengthened against the other major currencies in the Asian session on Friday as the nation's consumer prices rose in May, hitting their fastest pace since 1982.

Nationwide consumer prices in Japan accelerated 3.7% on year in May, the Ministry of Internal Affairs and Communications said. The headline figure was in line with expectations and up from 3.4% in April.

On a monthly basis, overall inflation and core CPI both added 0.4%.

Japan saw a seasonally adjusted unemployment rate of 3.5% in May, the Ministry of Internal Affairs and Communications said - beating forecasts for 3.6%, which would have been unchanged from the April reading.

The average of household spending in Japan was down 8.0% on year in May, the Ministry of Internal Affairs and Communications said - standing at 271,411 yen. That was well shy of forecasts for a decline of 2.1% on year following the 4.6% contraction in April.

The value of retail sales in Japan was down 0.4% on year in May, the Ministry of Economy, Trade and Industry said - coming in at 11.434 trillion yen. That beat forecasts for a decline of 2.0% following the 4.3% contraction in April.

The yen which ended yesterday's deals at 101.71 against the US dollar strengthened to a 5-week high of 101.40. The pair was quoted at 101.71 at yesterday's close. If the yen extends its uptrend, it is likely to find resistance around the 100.82 area.

The yen rose to 138.16 against the euro, 113.60 against the Swiss franc, 95.54 against the Australian dollar and 94.89 against the Canadian dollar, from yesterday's closing quotes of 138.36, 113.79, 95.73 and 95.14, respectively. The next possible resistance for the yen is seen around 137.49 against the euro, 112.89 against the franc, 94.39 against the aussie and 93.41 against the loonie.

Against the pound, the yen climbed to 172.78, from yesterday's closing quote of 173.13. The next possible upside target for the yen is seen at 171.65 level.

House prices growth in the UK continued to slow in June, results of a survey by Hometrack showed.House prices rose 0.3% on month in June, a slower rate of increase than the 0.5% rise in May. This marked the slowest growth in prices since January 2014.

The yen recovered to 88.96 against the NZ dollar, from an early nearly a 3-month low of 89.38. At yesterday's close, the yen was trading at 89.25 against the kiwi. If the yen extends its uptrend, it is likely to find resistance around the 87.90 area.

New Zealand posted a merchandise trade surplus of 285 million New Zealand dollars in May, Statistics New Zealand said- representing 6.2% of exports. That topped forecasts for an increase of NZUSD250 million following the NZUSD534 million surplus in April.

Looking ahead, German import prices for May are due at 2:00 am ET.

In the early European session, Swiss KOF leading indicator for June, UK GDP and current account data for the first quarter, Eurozone economic sentiment index for June are due to be released.

At 8:00 am ET, German preliminary CPI for June is set for release.

In the New York session, Canada industrial product price index for May and Reuters/University of Michigan's final consumer sentiment index for June are due.



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Source: Alliance News


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