According to Norinchukin, the rate of inflation in July reached the highest level in 5 years. The economic situation improved thanks to the recovery of the manufacturing industry along with the Japanese government’s unprecedented support of the national economy.
The results of the survey give us to understand that Japanese households are probably going to increase their spending. The consumption growth is backed by higher incomes and bonus rewards.
The experts expect July’s CPI to grow by 0,6% (y/y).it is expected that higher energy prices will be the inflation drivers.
Forex
At the same time, the Japanese Yen keeps forming a correction against the long-term trend versus the US Dollar. At this point, USDJ{Y has finished the downswing represented by wave A/B of level H8.
A break below the local low 96.81 will start a bigger downswing – wave A/B of level H12. If this is the case, the closest levels of support will be found around 96.59/54, 96.26/19, 95.92/80. At the same time, a break above 99,14 will start a major upswing represented by wave A/B of wave level Daily. In this case, 99.94 will turn into the key level of resistance.
