The Yen is retreating again. Overview for 18.01.2019

USDJPY is recovering; market players are reducing the amount of their “safe haven” assets.

The Japanese Yen continues falling against the USD on Friday. The current quote for the instrument is 109.39.

While the USA are dealing with its Government Shutdown and there are significant stresses on the currency market, investors do not require a lot of “safe haven” assets and try to reduce their amount. It helps the Yen to correct. 

The statistics published today showed that the National Core CPI was just 0.7% y/y in December, which is worth that expected, after being 0.9% y/y in the previous month. Decline in the core inflation let market players expect decline of the inflation as well, which remains the key problem for the Bank of Japan, because a long period of positive dynamics was followed by decline. Right now, the regular can’t be sure that the indicator may start growing steadily in the nearest future. 

The Industrial Production lost 1.0% m/m in November. It is the revised report, which is a bit better than the previous estimate, but it’s still rather unstable and prevents investors from making any positive conclusions. 

Demand for the Yen as a “safe haven” may return at any moment – the Congress still hasn’t decided on financing, that’s why any other issues are put on the back burner.