Investing.com - The U.S. dollar traded lower against the Japanese yen during Friday’s Asian session despite some encouraging signs regarding Japan’s long-standing bout with deflation.
In Asian trading Friday, USD/JPY fell 0.32% to 98.70. The pair was likely to find support at 97.77, Wednesday's low, and resistance at 99.67, Friday's high.
Earlier Friday, Japan’s Statistics Bureau said Japan’s core consumer price inflation rose 0.8% last month after a 0.7% increase in July. Analysts expected an August increase of 0.7%.
The Statistics Bureau also said that Tokyo’s core CPI, which excludes fresh food costs, fell 0.2% in August. Analysts expected a decline of 0.3%.
The national CPI number is an encouraging sign because Japan, the world’s third-largest economy, has had a multi-decade battle with deflation. A core tenant of Prime Minister Shinzo Abe’s efforts to rejuvenate the economy has been an ambitious goal of engineering inflation of at least 2% in two years.
While some members of the Bank of Japan and other Japanese policymakers have said 2% inflation in two years will be a hard goal to reach, Friday’s CPI numbers may serve as another sign that Abenomics, albeit slowly, is working.
Abe’s plan to raise sales tax in Japan also remains in focus. Next week’s tankan survey from the Bank of Japan is seen as crucial to Abe’s plan to push through the tax hike. Abe is looking to raise the sales tax to 8% from 5%, but he will not proceed with that measure if the world’s third-largest economy is not showing signs of improvement.
Elsewhere, EUR/JPY fell 0.31% to 133.16 while AUD/JPY dropped 0.42% to 92.32.
In Asian trading Friday, USD/JPY fell 0.32% to 98.70. The pair was likely to find support at 97.77, Wednesday's low, and resistance at 99.67, Friday's high.
Earlier Friday, Japan’s Statistics Bureau said Japan’s core consumer price inflation rose 0.8% last month after a 0.7% increase in July. Analysts expected an August increase of 0.7%.
The Statistics Bureau also said that Tokyo’s core CPI, which excludes fresh food costs, fell 0.2% in August. Analysts expected a decline of 0.3%.
The national CPI number is an encouraging sign because Japan, the world’s third-largest economy, has had a multi-decade battle with deflation. A core tenant of Prime Minister Shinzo Abe’s efforts to rejuvenate the economy has been an ambitious goal of engineering inflation of at least 2% in two years.
While some members of the Bank of Japan and other Japanese policymakers have said 2% inflation in two years will be a hard goal to reach, Friday’s CPI numbers may serve as another sign that Abenomics, albeit slowly, is working.
Abe’s plan to raise sales tax in Japan also remains in focus. Next week’s tankan survey from the Bank of Japan is seen as crucial to Abe’s plan to push through the tax hike. Abe is looking to raise the sales tax to 8% from 5%, but he will not proceed with that measure if the world’s third-largest economy is not showing signs of improvement.
Elsewhere, EUR/JPY fell 0.31% to 133.16 while AUD/JPY dropped 0.42% to 92.32.