Japan continues to maintain monetary easing measures.

In recent years, Japan has been grappling with deflationary pressures. However, with the global rise in inflation due to factors such as oil prices and other consumer goods, Japan sees this as an opportunity to generate inflation through special monetary easing policies. It is believed that Japan has achieved some success with these policies. However, it is necessary to closely monitor the situation and prevent uncontrollable inflation.

The next announcement of the Consumer Price Index (CPI) is scheduled for June 23, with the forecast adjusted to 4.1%. This indicates a further increase in inflation compared to the previous announcement of 3.5%.

Haruhiko Kuroda, the Governor of the Bank of Japan (BOJ), stated that the BOJ would wait and assess the impact and side effects of the monetary policies that diverge from those of other countries, in order to combat over 25 years of deflation. Kuroda announced a plan for review in April, but provided few details at that time.

Furthermore, he expressed his opinion on the inflation trend, stating, "We expect the inflation trend to accelerate as economic activities continue to improve and the labor market tightens further. However, there is great uncertainty in negotiations for wage increases next year and in the sustainability of the wage hikes."

Furthermore, he stated, "We expect the inflation rate to decelerate. Although it is true that this deceleration is proceeding slowly, we are still in the early stages of this deceleration, and there is uncertainty as to whether the inflation rate will gradually decelerate in the future or decelerate sharply."

Seiji Adachi, a member of the Bank of Japan's Policy Board, mentioned that it is premature to consider tightening monetary policy due to the uncertainty surrounding price trends. He argued against prematurely shifting from the easing policy towards a policy of controlling the yield curve, as consumer inflation in Japan is accelerating faster than initially anticipated. The risk to price trends could lean towards the downside in the long term due to the increased fragility of the global economy.

The BOJ announced the outcome of their policy meeting, stating that the BOJ would continue its highly accommodative monetary easing policy to support the ongoing economic recovery in Japan, which remains vulnerable. Additionally, the BOJ maintains its Yield Curve Control policy, in which it sets a short-term interest rate target at -0.1% and a 10-year Japanese Government Bond (JGB) yield target at 0%, as before.

Technical analysis data (5H)

Resistance: 141.45, 141.54, 141.61

Support: 141.28, 141.22, 141.12

Source: Investing.com