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USD/JPY: Waning inflationary pressures, steady BOJ bond buying points to upside risks
Business activity in Japan is expanding at the fastest pace in almost a year, signalling economic growth may rebound in the June quarter after a shock decline in the first three months of the year. However, inflationary pressures continue to moderate, creating doubt over the ability for the Bank of Japan to increase rates further without spiraling the economy back into deflation. For the moment, USD/JPY continues to drift higher, underpinned by improved risk appetite and gaping yield differentials between the United States and Japan. Japan’s economy showing improvement, but inflation is softening The “flash” au ... (full story)