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Inflation in Japan Gradually Decreases

3/29/2023 11:28 AM

Against the background of the lack of directional dynamics of the US dollar, the yen is trying to grow, trading at 131.71.

Yesterday, the Japanese currency received significant support after the publication of the core consumer price index, which fell by 0.4% to 2.7% YoY instead of 3.1% earlier, although analysts had expected an increase to 3.5%. These data indicate the effectiveness of the measures taken by the Bank of Japan, as a result of which inflation is reduced even when taking into account the super-soft monetary policy: the country remains the only one of the leading economies where the interest rate is in the negative zone at –0.10%. In turn, the department is implementing an unlimited bond buyback program, which is yielding positive results.

The US dollar slowed down, trading at 102.200 in the USD Index. The currency could be supported by data on the consumer confidence index from the Conference Board, which showed an increase to 104.2 points from 103.4 points earlier but this did not happen. Perhaps, investors were confused by the early too positive forecast, which suggested the growth of the index to 110.0 points. Until Thursday, when the data on the gross domestic product (GDP) of the United States will be published, serious fluctuations in the quotes should not be expected.

On the daily chart, the trading instrument is moving within a corrective trend above the resistance line of the local channel around 130.00.

Technical indicators strengthen the sell signal: fast EMAs on the Alligator indicator move away from the signal line, expanding the range of fluctuations, and the AO histogram forms downward bars below the transition level.

Resistance levels: 132.60, 136.65. | Support levels: 130.50, 127.30.

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