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As of 8:30 AM Beijing time, spot platinum rose 0.13% and spot palladium rose 0.19%.July 31 – Tokyos inflation accelerated for the second consecutive month, raising hopes that the Bank of Japan will raise interest rates again in the coming months, although the market widely expects the bank to hold rates steady today (July 31). Data released by Japans Ministry of Internal Affairs and Communications on Friday showed that Tokyos core CPI rose 1.9% year-on-year in July, higher than the market expectation of 1.8%. The "core-core CPI" (closely monitored by the Bank of Japan as a measure of underlying inflation), excluding fresh food and energy, rose 2%, and the overall CPI also rose 2%. The rise was driven by a narrowing decline in electricity and natural gas costs, coupled with a steady increase in processed food prices. Gasoline prices saw a wider decline due to government measures. "Given the ongoing situation in the Middle East, I think prices – especially energy-related goods – will continue to rise, and the costs of food and other items will also increase further," said Takeshi Minami, chief economist at the Norinchu Kinpo Research Institute. "Therefore, inflation is likely to remain above 2% starting this fall."Shares of Tokyo Electron rose 13% in Japan.Japans Topix index rose 1.1%.On July 31st, market reports indicated that Apple is testing chips from Chinese memory manufacturer Changxin Technology. During Apples Q3 2026 earnings call on July 30th (local time), an analyst asked whether Apples pursuit of more diverse memory sources would ensure supply. Apple CEO Tim Cook stated that Apple is evaluating all options. He noted that there are three main suppliers for DRAM (Dynamic Random Access Memory), and having more suppliers would be beneficial, potentially offering advantages in both supply and pricing.

Prior to the release of Australian employment data, the AUD/JPY pair attempts to regain 89.00

Alina Haynes

Apr 12, 2023 13:44

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The AUD/JPY pair attempts to reclaim the critical resistance level of 89.00 during the Asian session. Kazuo Ueda, the governor of the Bank of Japan (BoJ), has advocated for an extension of the already decade-long ultra-loose monetary policy in order to consistently achieve an inflation rate above 2%.

 

The decelerating Producer Price Index (PPI) contradicts the optimistic outlook of the Japanese government regarding wage growth. As expected by market participants, the March PPI did not change. The annual PPI came in at 7.2%, which was higher than the consensus estimate of 7.1% but lower than the previous release of 8.1%. The inability of companies to sustain accelerating production rates at factory gates is indicative of weak household demand.

 

Analysts at Commerzbank anticipate that the Japanese Yen will only appreciate over the long term if the current monetary policy is abandoned quickly.

 

Regarding the Bank of Japan's (BoJ) Yield Curve Control (YCC), the IMF has stated that allowing more flexibility in YCC could have repercussions for global markets, but it could also prevent future policy shifts that could result in significant spillovers.

 

Investors are awaiting the March Employment Report for fresh impetus in the Australian Dollar. The market expects the Australian economy to add 20,000 employment, which is less than the previous estimate of 64.6K. While the Unemployment Rate is expected to rise to 3.6% from 3.5% in February, it is anticipated that the Unemployment Rate will increase to 3.6%.

 

Governor Philip Lowe of the Reserve Bank of Australia (RBA) has left the door open for additional rate hikes if Australian inflation persists, so the publication of stronger-than-expected employment gains could reignite fears of additional rate hikes.

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