USD/JPY – Yen Edges Higher As Japanese Inflation Data Disappoints

The Japanese yen edged higher in Friday trading, following the release of weak Japanese inflation numbers. In Friday trading, the dollar is putting pressure on the yen, as USD/JPY continues to test the 93 line. Both the Tokyo and National CPIs posted declines, and Household Spending dropped sharply. In the US, Thursday's key releases were a mix. GDP climbed a disappointing 0.1%, while Unemployment Claims easily beat the forecast. There are a host of key releases on Friday, highlighted by ISM Manufacturing PMI. There are no Japanese releases on Friday.

Japanese releases continue to point to a weak economy, despite the agressive efforts of the Japanese government and the Bank of Japan. Both have declared war on inflation, but we are yet to see tangible results from these efforts, as underscored by Thursday's numbers. Tokyo CPI declined by 0.6%, while National Core CPI fell 0.2%. Although the markets had anticipated these numbers, the readings point to a deflationary trend in...