USD/JPY is almost unchanged in Wednesday's trade so far. In the European session, the pair is trading at 106.28, down 0.10% on the day.
JAPANESE INFLATION IN FOCUS
The spotlight is on Japan’s inflation indicators, with three inflation releases this week. On Tuesday, inflation numbers were a mixed bag. BOJ Core CPI, which is the preferred inflation gauge of the Bank of Japan, remains at low levels. In June, the index ticked lower to 0.0%, down from 0.1% a month earlier. There was better news from the Services Producer Price Index, which climbed to 1.2% in July, up from 0.8% beforehand. This was the strongest gain since March. On Thursday, Tokyo Core CPI will be released. The index improved to 0.4% in July and is projected to tick lower to 0.3%.
Weak inflation levels reflect weak economic activity, but has also enabled the Bank of Japan to run huge fiscal deficits at a relatively low cost. The bank continues to stubbornly cling to an inflation target of 2%, which remains an unrealistic goal in the near future. In April, the Bo
J expanded its stimulus program, promising to buy an unlimited amount of bonds. If inflation levels do rise, the bank could be forced to reduce its massive stimulus program.
USD/JPY TECHNICAL ANALYSIS
USD / JPY Daily Chart
USD/JPY gained ground in the Asian session but then reversed directions. The pair is flat in the European session
