Daily Digest Market Movers: Japanese Yen struggles to lure buyers despite a rise in domestic consumer inflation
- Japan Consumer Price Index rose from the 2.2% YoY rate to 2.8% in February and remains well above the Bank of Japan's 2% target, lending some support to the Japanese Yen on the last day of the week.
- The Core CPI, which excludes volatile fresh food prices, picked up sharply from the 2% annualized pace seen in January and rose to 2.8% during the reported month, broadly in line with market expectations.
- Meanwhile, the so-called “core core” index that strips away both fresh food and energy prices eased further from the 40-year high touched in 2023 and came in at 3.2% in February as compared to the 3.5% previous.
- This comes on top of a much-stronger-than-expected pay hike by major Japanese firms, which is expected to fuel demand-driven inflation and should allow the BoJ to tighten its monetary policy further.
- Japan's Finance Minister Shunichi Suzuki reiterated that the government is watching FX moves with a high sense of urgency and important for currency exchange rates to move stable reflecting fundamentals.
- Despite the Federal Reserve's projected three rate cuts this year, elevated US Treasury bond yields helped the US Dollar to regain positive traction on Thursday and should lend support to the USD/JPY pair.
- The US Department of Labor (DOL) reported that there were 210K Initial Jobless Claims during the week ending March 16 as compared to the previous week's print of 212K and better than the 215K expected.
- Market participants now look forward to Fed Chair Jerome Powell's scheduled speech later during the early North American session for some meaningful impetus and short-term trading opportunities.
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