Yen pulls away from three-month low, edges up on Japan CPI figures
In Tokyo today, the yen edged up from a three-month low versus the dollar. This happened after the figures showing Japan’s core consumer prices cut down at a slower rate in the month of April, keeping the Bank of Japan on target to move up the rates in the near-term.
A trader at a Japanese bank was of the view that the figures showing Japan’s core consumer prices were not all that unexpected and therefore buying the yen was a late reaction to the drop in U.S. stocks, due to some risk fears.Â
Traders are planning to keep a watch on any yen strength in the sessions.Â
On the other hand, Forex market players have extensively borrowed the lower yen currency to finance purchases of higher priced currencies and equities in the carry trade. This action has aided raise sterling to a 15-year high versus the yen.
As the dollar came down from near 121.41 yen to a 121.21 yen in the late New York trade, it should be remembered that the U.S. currency had risen to a three-month high of 121.88 yen earlier this week too.
The euro had also dipped from near 163.01 yen to 162.71 yen on Thursday.
With Japan’s balanced growth and development which can be viewed in a quiet good shape now, hopes have build up for the Bank of Japan to boost rates from the current 0.5 percent to a 12-year high of 0.75 percent in August or September, after the parliamentary elections in the month of July.