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Yen continues slipping after tepid inflation figures

Yen continues slipping after tepid inflation figures

The yen slipped back against the U.S. dollar and euro in Asian trade yesterday after soft inflation figures dampened expectations of a rate hike by the Bank of Japan next month, dealers said.
The U.S. dollar strengthened to 121.36 yen in Tokyo afternoon trade from 121.15 in New York late Thursday.
The euro slipped to US$1.2925 from US$1.2936 but firmed to 156.85 yen from 156.73.
Japan announced yesterday that core consumer prices rose by 0.1 percent in December from a year earlier, below market forecasts for 0.2 percent.
"The consumer price figures were almost flat and confirmed that inflation is increasing only very gradually," said Masaki Fukui, senior market economist at the forex division of Mizuho Corporate Bank.
The yen has languished, for a time hitting a four-year low against the U.S. dollar, since the Bank of Japan on January 18 decided not to raise super-low interest rates.
'Decade of deflation'
The central bank acted after strong pressure from the government, which said that the country has yet to definitively defeat a decade of deflation.
The yen enjoyed a temporary spurt of support on Thursday after hawkish remarks by Bank of Japan policymaker Miyako Suda revived the possibility of a rate hike at the nine-member board's February 20-21 meeting but the inflation figures undercut that line.
"Looking at the remarks by Suda, the market cannot rule out the possibility of a rate hike, despite the weak inflation data," Sumitomo Trust and Banking forex dealer Norihiro Takemura said.


Updated : 2021-02-25 19:19 GMT+08:00