Wholesale Inflation

Japan’s July inflation data strengthened expectations that the Bank of Japan could lift its policy rate in September. Even so, wide rate gaps with the Federal Reserve, European Central Bank and Bank of England may continue to shape the direction of major yen pairs.

Japan’s July inflation data have strengthened expectations that the Bank of Japan could lift rates in September. Yet the outlook for USD/JPY, EUR/JPY and GBP/JPY remains tied to whether the Fed, ECB and BoE preserve their yield advantage over the yen.