More Japan data: April retail sales and Manufacturing output both rise fast than expected

💡 DMK Insight

Tokyo’s core CPI missing forecasts is a big deal for traders right now. With inflation data coming in weaker than expected, the Bank of Japan’s potential June rate hike is now in jeopardy. This could lead to a weaker yen, impacting forex traders who are shorting the currency. If the BOJ decides to hold off on tightening, we might see a shift in market sentiment, pushing the USD/JPY pair higher. Keep an eye on the 135 level for USD/JPY; a break above could signal a stronger bullish trend. Moreover, this CPI miss could ripple through related markets, affecting commodities and equities tied to Japanese economic performance. But here’s the flip side: if the BOJ surprises the market with a rate hike despite the CPI data, we could see a sharp reversal in yen pairs. So, traders should monitor not just the CPI but also any BOJ commentary leading up to the June meeting. The immediate focus should be on the next few days as traders digest this data and position themselves accordingly.