Japanese Yen Tumbles Down
By Daisy Joseph
The US dollar has been gaining in the market against the basket of international currencies.
The Japanese yen continues to weaken further against the currency as the disappointing cash earnings data was released. The labor cash earnings lost 0.4% on year during this March. The expectation was a 0.5% gain after a 0.4% rise in February. However, the cash earnings fell majorly against the expectations. It reached the lowest point in two years.
The overall real cash earnings data is also against the market expectations. The overall ratings lost 0.8% while the February data was mostly flat. The Bank of Japan is looking out for ways to boost local inflation through the wages. However, the disappointing data shows that BoJ may not be willing to make policy changes. The businesses have been encouraged by the BoJ to increase the wages so that consumer spending and moribund prices could increase. With lower inflation, the companies were hesitant to boost the wages.
Haruhiko Kuroda, governor of BoJ has advised the Parliament of Japan that aggressive easing of monetary policies is required to keep the inflation at 2%. He added that he is confident that the market will favor the policies. The consumer price data released earlier showed just 0.2% of annualized gain which disappointed the investors.
The USD/JPY pair increased to 113.60 from 113.12 just before the release of the data. The inflation weakness and inability to boost wages further weigh in on the value of Yen in the forex market.
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