The Japanese Yen gains little from a hot Tokyo inflation report
Tokyo's core inflation rate came in at 2.7% against a 2.4% forecast, a beat that should have done more for the Yen than it did. USD/JPY slipped back below 158.00 on the release and is still up on the week.
Tokyo's core inflation rate rose to 2.7% in September, just above the forecast of 2.4%. Despite this, the Japanese Yen (JPY) weakened against the US Dollar (USD), falling below 158.00. This came after speculators bought Yen in record amounts before the Bank of Japan's (BoJ) rate hike on September 18. The BoJ had raised rates twice in an eight-month period, in June and on September 18.
The Yen's decline persisted even after the BoJ's rate hike and Tokyo's inflation report. The Yen has been weakening since the BoJ's rate increase, as speculators had prepositioned themselves to buy the currency. The market's bias is to go long above 157.50, aiming first for 158.50 and then 159.00.
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