The Yen continues falling. Overview for 09.03.2022

USDJPY is keeping its positive momentum and not going to stop yet. 

The Japanese Yen continues “losing weight” against the USD. The current quote for the instrument is 115.82.

The revised Japanese GDP in the fourth quarter of 2021 was an unpleasant surprise: the country’s economy added only 4.6% q/q against the preliminary reading of 5.4% q/q and the expected one of 5/6% q/q. 

Nevertheless, the actual GDP data is the strongest in recent times, even considering the negative revision of the first estimate. There is an opinion that in the first quarter of 2022 the Japanese economy might “shrink” again, this time due to the energy prices surge and similar consumer response. 

Earlier today, one of the BoJ members said that inflation in the country would surely rise given the current energy prices surge. The weak CPI is a big issue for Japan, and now the trend can become more favourable. The reasons for that, however, are quite questionable and painful, because the energy and commodity prices surge will eventually result in higher costs of food and fuel in the short term. This, in its turn, will have a negative impact on household income and corporate profit, making both save on expenses. The country’s economy may suffer significant losses. 

The economic growth point in Japan in the mid term might be the overseas demand for goods and services. 

What is happening right now is rather neutral so far but the local inflation boost may have a negative influence on the JPY.