The yen crosses attempted to recover earlier today after weaker than expected inflation data from Japan. But the crosses were then weighed down by weakness in Asian equities. Japanese national CPI core rose 1.3% yoy in March, unchanged from February and was below expectation of 1.4%. Tokyo CPI core rose 2.7% yoy in April, versus expectation of 2.8% yoy. Most of the jump in Tokyo CPI came from the sales-tax hike on April. Taking away that impact, Tokyo CPI rose 1.0% yoy, unchanged from March. Also released from Japan, all industry index dropped -1.1% mom in February.
Asian equities are broadly lower as weighed down by earnins outlook and escalating tensions in Ukraine. It's reported that Russian started new military exercises in the border and US Secretary of State Kerry warned that Russia is running out of time to comply with the accord to ease tensions in Ukraine. S&P lowered Russia's soverign rating to BBB-, just one notch above junk and assigned negative outlook. S&P said in a statement that "the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy and hence further undermine already weakening growth prospects."
In Canada, BoC governor Poloz said that "there is a growing consensus that interest rates will still be lower than we were accustomed to in the past." And, "after such a long period at such unusually low levels, interest rates won't need to move as much to have the same impact on the economy."
Looking ahead, UK will release retail sales and BBA mortgage approvals while US will release U of Michigan sentiment final reading for APril.