The USD/JPY pair is trading with a rise for the second consecutive day, and investors are clearly sympathetic to the dollar. Market sympathy is a strange thing. The USD/JPY pair is rising not because absolutely everything is bad with the yen and statistics are minor, but because the dollar is growing on all fronts.
The published morning protocol of the May meeting of the Bank of Japan showed that the inflation target of 2% will be reached in the first half of the 2016 financial year. Well, it’s just not enough positivity. It has been repeatedly stated that these fantastic 2% will be easy to reach, but it will be difficult to keep the inflation at a mark for at least a year. That is still uncertain, as the Bank of Japan is not saying what instruments it will use to sustain this level.
According to the document, a number of monetary politicians of the BoJ want to see how weak Tokyo inflation will affect the general data on the country. There of course will be an effect, but most likely it will be blurred.
At the meeting in May, there was an opinion on the expectations of rapid growth in household spending. But the bet on has failed more than once, so it is unlikely to seriously count on similar factors. Naturally, the government encourages companies and enterprises to increase wages, where therefore a growth of incomes will take place. But it is not clear whether the Japanese will begin to vigorously spend money.
There is another important point which needs to be mentioned, since it touches upon the next financial year. The minutes of the meeting of the Bank of Japan speak about the risks from the slowdown of the Chinese economy. In itself, a slight deceleration doesn’t scare anyone, but its effects are unpleasant. In 2013, for example, the trade turnover between the countries amounted to $ 312.55 billion. Japan sells China all sorts of equipment - from construction to consumer, electronics and automobiles. China exports to Japan everything produced with low added value: clothes, shoes, accessories, chemicals.
RoboForex Analytical Department