Japan August core CPI +3.0% vs. +3.0% expected

JPY

The Japanese yen (JPY) is the official currency of Japan and is currently the third most traded currency in the world after only the US dollar and the euro. The JPY is widely used as a reserve currency and is relied upon by currency traders as a safe haven currency. Originally implemented in 1871, the JPY has had a long history and has survived several world wars and other events. This was followed by the creation of the Bank of Japan (BoJ) in 1882 and the Japanese government’s full supervision of the JPY only in 1971. Japan has historically maintained a policy of currency intervention, which continues to this day. The BoJ also follows a policy of zero to near zero interest rates and the Japanese government has previously had a strict anti-inflation policy. What factors affect the JPY? The aforementioned role of the BoJ has dramatically shaped the JPY in the currency markets. Any further changes in monetary policy by the central bank are closely monitored by forex traders. In addition, the Overnight Call Rate is the most important short-term interbank rate. The BoJ uses the call rate to signal monetary policy changes, which in turn affects the JPY. The BoJ also buys both 10- and 20-year Japanese government bonds (JGBs) on a monthly basis to inject liquidity into the monetary system. The resulting yield on the benchmark 10-year JGB helps serve as a key indicator of long-term interest rates. Economic data is also very important for the JPY. The most important of these publications in Japan are gross domestic product (GDP), the Tankan survey (quarterly business sentiment and expectations), international trade, measures of unemployment, industrial production and money supply (M2+CD).

The Japanese yen (JPY) is the official currency of Japan and is currently the third most traded currency in the world after only the US dollar and the euro. The JPY is widely used as a reserve currency and is relied upon by currency traders as a safe haven currency. Originally implemented in 1871, the JPY has had a long history and has survived several world wars and other events. This was followed by the creation of the Bank of Japan (BoJ) in 1882 and the Japanese government’s full supervision of the JPY only in 1971. Japan has historically maintained a policy of currency intervention, which continues to this day. The BoJ also follows a policy of zero to near zero interest rates and the Japanese government has previously had a strict anti-inflation policy. What factors affect the JPY? The aforementioned role of the BoJ has dramatically shaped the JPY in the currency markets. Any further changes in monetary policy by the central bank are closely monitored by forex traders. In addition, the Overnight Call Rate is the most important short-term interbank rate. The BoJ uses the call rate to signal monetary policy changes, which in turn affects the JPY. The BoJ also buys both 10- and 20-year Japanese government bonds (JGBs) on a monthly basis to inject liquidity into the monetary system. The resulting yield on the benchmark 10-year JGB helps serve as a key indicator of long-term interest rates. Economic data is also very important for the JPY. The most important of these publications in Japan are gross domestic product (GDP), the Tankan survey (quarterly business sentiment and expectations), international trade, measures of unemployment, industrial production and money supply (M2+CD).
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