The USD/JPY pair moved higher as the yen headed lower versus dollar as the risk aversion eased. Still, the jitters prevail after a new 5.8 quake hit the north of Japan on Wednesday.
The Japanese government cut its assessment for the economy for the first time in six months which weakened the status of the yen on the fragile state of the economy compared to its peers. The Bank of Japan agreed to introduce more funds and to intervene in the financial market if needed, as the BOJ is trying to revive the economy from its worst phase after the massive quake that hit Japan on 11 March.
Moreover, the International Monetary Fund cut its economic growth forecasts for the U.S. and Japan, where the Japanese government said problems remains at the nuclear plant after this week’s quakes.
Thursday will witness no economic data from Japan, as all the focus will be on the American data with inflation and jobs figures.
At 12:30 GMT, U.S economy will release the weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment benefits is expected marginally steady at 380 thousand following 382 thousands the previous week; while continuing claims are expected to have dropped to 3703 thousand from 3723 thousand.
The U.S. PPI for March will be released at 12:30 GMT as well; inflation is expected to have eased on the month with 1.0% rise following 1. 6% and steady on the year at 0.2%. Excluding food and energy prices at factory gates are expected to have ticked higher at 6.2% on the month following 5.6% and at 1.9% on the year.
The producer price index data is the first indicator for inflation in the United States, and it could push the dollar to remain fragile against majors as subdued inflation pressures provides the needed room for the feds to keep their current monetary policy opposed to other central banks that are turning hawkish, especially the ECB.
Still, the pair is buoyed by the prevailing sentiment and shall the jitters start to ease over the outlook with good data, the yen will remain the weakness and USD/JPY will resume its upside correction.
Originally posted here
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