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The Japanese yen was steady even as price pressures in Japan re-accelerated last month amid the growing view that inflation is peaking.
Nationwide core CPI rose 3.3% in June from 3.2% in May. The so-called core-core inflation gauge (which excludes both food and energy) slowed to 4.2% on-year from 4.3% in May. This follows a slower-than-expected Tokyo June inflation report as cost-push factors subside, providing some space for the Bank of Japan (BOJ) to persist with the ultra-easy monetary policy for now.
BOJ is widely expected to keep its policy settings unchanged when it meets next week, but the key focus will be on fresh quarterly projections and discussions regarding phasing out the controversial yield curve control (YCC) policy after BOJ summary of opinions at the June policy meeting quoted one board member saying the central bank should debate tweaking YCC to improve market function and mitigate its “high cost”.