The Japanese Yen crosses rebounded today as the stock market and risk appetite stabilizes. Like the rest of the world, Japan has also been hit by inflationary pressures.
The latest inflation data shows that core inflation has hit a 10 year high due to rising food and gasoline prices. This has been a huge drag on the Japanese economy and part of the reason why the trade surplus fell for the first time in 5 years last month. The deterioration in trade was significant with the surplus falling a whopping 89 percent in June. Japan is having a particularly tough time with slowing export demand and surging import prices, which is why the BoJ has turned bearish on the economy. There are a lot of Japanese economic data due next week including the jobless rate, retail sales and industrial production.
