Yen Tumbles amid Persistent Deflation
The Japanese yen extended its tumble today, reaching the lowest level since June 2010 against the US dollar and the lowest since April 2011 versus the euro, as persistent deflation spurred talks that policy makers have no other choice than to continue introducing monetary easing measures, weakening the currency.
The Japanese core Consumer Price Index fell 0.2 percent year-on-year in December. The Tokyo core CPI declined 0.5 percent last month on an annual basis. The data matched forecasts, but that did not make it any less negative.
Continuous deflation suggests that all the accommodative measures that the BoJ has taken so far were not enough. That likely means even more monetary accommodation from the central bank. Such outlook is very bearish for the Japanese currency.
USD/JPY climbed from 90.30 to 90.93, reaching 91.18 intraday, and EUR/JPY advanced from 120.76 to 122.37 as of 20:27 GMT today. GBP/JPY ticked up from 142.56 to 143.66.
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Earlier News About the Japanese Yen:
- Yen Resumes Decline (2013-01-24)
- Yen Rallies Even as BoJ Introduces Open-Ended QE Program (2013-01-22)
- Yen Advances as BoJ Starts Meeting (2013-01-21)
- Another Bad Week for Yen Ahead of Policy Decision (2013-01-19)
- Anticipation of Intervention Continues to Drive Yen Down (2013-01-18)