The Japanese Yen is weaker across the board after mostly disappointing Japanese economic data. Household spending, the job-to-applicant ratio, industrial production, retail trade, and construction orders all fell short of expectations.
The only improvement that we saw was in housing starts. Tokyo reported slightly faster CPI growth, but not enough to indicate that deflation has been beaten. As expected, the Bank of Japan left interest rates unchanged at 0.50 percent. The semi-annual report indicated that the central bank also revised their CPI forecast lower. This confirms that the BoJ will remain on hold for some time and explains todays sharp rally in carry trades. Next week is Golden Week in Japan, which means that most Japanese are on holiday so no significant data is due release.