Japan may have better control of inflation than expected.

The Consumer Price Index (CPI) announced on June 23 revealed a further decrease in inflation after a slight increase of 3.5%. The current inflation rate stands at 3.2%, which is significantly lower than the projected 4.2%. This could be seen as a positive signal for Japan, which has implemented special easing policies and still has the opportunity to continue with such policies if inflation remains relatively low. Ultimately, Japan aims to maintain inflation at around 2%, which is desirable.

There are calls from policymakers at the Bank of Japan (BOJ) to address the ongoing debate over Yield Curve Control (YCC). The June meeting indicated that implementing extraordinary monetary policies may not be the best option. The implementation of YCC sets short-term interest rates at -0.1% and keeps the yield on 10-year government bonds around 0%. Some investors speculate that the central bank may adjust YCC in the near future.

Some members of the BOJ suggest that "the bank should maintain the overall framework of monetary easing measures for now, and a discussion on adjusting YCC should take place in the near future." They consider the necessity of preventing drastic fluctuations in future interest rates resulting from current monetary policies.

Analysts have observed that the views on YCC and the current easing policies represent only a minority perspective within the Bank of Japan (BOJ) committee. Some analysts criticize the implementation of YCC, attributing it as a cause for the recent decrease in the value of the yen, which in turn increases the cost of importing raw materials. Investors themselves are closely monitoring these changes.

Japan's Finance Minister, Taro Aso, referred to a statement by the Jiji news agency, stating, "While the BOJ should continue with its accommodative monetary policy, it should also discuss changes to the YCC policy to improve its market function and alleviate the increased costs from the weakened yen."

Looking at other economic indicators, Japan's Manufacturing Purchasing Managers' Index (PMI) has slightly decreased from the previous month, standing at 49.8. This is due to a decrease in production capacity and a decline in new orders, as evidenced by the decrease in exports. It is not only the Manufacturing PMI that has decreased; the Services PMI has also declined, reaching 54.2, possibly due to reduced hiring.

Technical analysis data (5H)

Resistance: 143.56, 143.67, 143.76

Support: 143.37, 143.27, 143.17

Source: Investing.com