Japanese Yen Still Soft, USDJPY Targeting 124.00?

[DailyFx]

After the Bank of Japan left rates steady at 0.50 percent last week and signaled that policy tightening isn?t likely in the near-term, the Japanese yen has continued to weaken as USDJPY inched towards 124.00.

The only economic news from the region did little to add to price action, as the Cabinet Office?s monthly economic report maintained that the world's second-largest economy is "recovering." The government upgraded its outlook on consumer spending, saying that it was "picking up" from "showing signs of picking up." Nevertheless, Hiroko Ota, Japan?s Economic and Fiscal Policy Minister, said that the upturn in private consumption remains fragile, noting that spending "isn't that strong as wage growth has stalled." Furthermore, the Cabinet Office reported "weakness in industrial production in some sectors" as a slowdown in the US has led demand for Japanese products to wane. Overall, it is clear that fiscal and monetary policy officials remain optimistic about the future of the Japanese economy, but expansion is far too frail to even consider rate normalization, and this sentiment alone should keep carry trades widely in play.