USD/JPY – Dollar Shrugs off Soft U.S. PPI, Pressures Yen

Sep 13 15:09 2017 Print This Article

USD/JPY has posted gains in the Wednesday session. In North American trade, the pair is trading at 110.63, up 0.45% on the day. The pair has posted two straight winning days, and is up 2.0% this week. On the release front, Japanese data beat expectations, but this was not enough to stem the dollar’s rally. The BSI Manufacturing Index jumped 9.4 points in the second quarter, its strongest reading in two years. Japanese PPI improved to 2.9%, just shy of the estimate of 3.0%. In the US, inflation numbers improved in August, but fell short of the estimates. PPI improved to 0.2%, shy of the estimate of 0.3%. As well, Core CPI gained 0.1%, short of the forecast of 0.2%. On Thursday, we’ll get a look at US CPI and unemployment claims.

The yen continues to lose ground, as investors have quickly put the Korean hot spot behind them, at least for the time being. In recent weeks, risk appetite has waned, as North Korea as inflamed tensions by firing missiles over Japan and testing nuclear devices, much to the consternation of the US, Japan and South Korea. As a safe-haven asset, we could see investors quickly return to the reliable yen if the war of words between US President Trump and North Korean President Kim Jong-un escalates. If the uneasy calm between North Korea and South Korea continues, the dollar could punch above the 111 level, which was last reached in August.

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