The USD/JPY is hovering at its highest level since April after Japan posted relatively weak economic data. The pair is currently trading at 109.88 which is a 0.05 per cent increase from its last data. This is also a 2 per cent increase from its lowest level on April 23rd.
USD/JPY Data Outlook
According to data released on Friday, Japanese economy remains unshaken. Its automotive companies such as Toyota, Nissan, and Mitsubishi have been posting gains as demand for cars surge. According to the PMI data released last week, Japan’s service sector is also on a positive performance.
On Friday, the USD/JPY pair was on the rise despite Japanese weak unemployment rate data. Japan’s unemployment rate rose as job opportunities took a dive. Unemployment rate rose from 2.6 per cent in March to 2.8 per cent in April.
Despite the increase in unemployment rate, Japan’s performance is better than other countries. Other countries recorded very high unemployment rates. United States for example had its unemployment rate rise to 6.1 per cent from 5.8 per cent.
Japan’s job application ratio dropped from 1.10 to 1.09 due to the emergency declarations by the Japanese government. Tom Learmouth, an economist at Capital Economics stated that:
“Job offers may have dipped again in May due to the third round of emergency declarations. That may further hold back the recovery in employment.”
Economic analysts are closely eyeing Tokyo’s inflation numbers. This is after the Consumer Price Index (CPI) in Tokyo tumbled by 0.4 per cent. Analysts had expected a 0.5 per cent decline after a 0.6 per cent fall in its last data release. Its core CPI fell by 0.2 per cent.
The weak economic numbers are keeping the Bank of Japan (BOJ) under to maintain its easy-money policies. With the extension of the state of emergency to cur Corona virus, there is a chance that the BOJ will push back the September deadline in a bid to recover the economy from the effects of the pandemic.
The USD/JPY rose after the economic data from the United States. Data by the Bureau of Labor Statistics showed that the initial jobless claims numbers declined from 444,000 to 406,000. This was termed as the best performance since the start of this year. The numbers are expected to continue declining as most states reopen.