Core Inflation for Bank of Japan Grows, Surpassing the 2% Target Again

Data released on Tuesday morning by the Bank of Japan indicated growth in the central bank’s core inflation reading for May.
This marks the first increase in the bank’s main inflation rates since February 2024.

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Inflation

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Inflation

According to the data, the Bank of Japan’s core inflation rate was 2.1% year-on-year in May,
exceeding market expectations of 1.9%.
The previous reading for the core inflation rate in April was 1.8%.

Dollar

Dollar Holds Decline Amid Anticipation of More Data

The dollar index stabilized below 105.5 on Tuesday after losing 0.3% in the previous session.
Investors are cautiously awaiting US Personal Consumption Expenditures (PCE) inflation data
and new comments from the Federal Reserve this week to better guide interest rate expectations.

Markets are also gearing up for the first US presidential debate between Joe Biden and Donald Trump on Thursday, as well as the French elections at the end of the week.
Meanwhile, the dollar reached its highest level in nearly two months last week,
with the Fed’s cautious approach to interest rate cuts contrasting with the major central banks’ earlier decisions to ease monetary policy.

The US currency has declined against most major currencies so far this week and is at risk of further decline against the yen, approaching the 160 per dollar level that previously prompted Japanese authorities to intervene in the currency markets.

Oil

Oil Hovers Near Two-Month High

West Texas Intermediate (WTI) crude futures stabilized just below $82 a barrel on Tuesday,
hovering near their highest levels in nearly two months as geopolitical risks in Eastern Europe
and the Middle East continue to support oil prices.

Ukraine announced on Monday that it had recently struck over 30 Russian oil processing and storage facilities,
while Russia blamed the United States for the Ukrainian missile strike on the occupied Crimea
and warned of unspecified consequences.

The European Union has also sanctioned more than twenty ships transporting Russian oil
and issued a ban on reloading Russian liquefied natural gas (LNG) in the EU for shipment to other countries.

In the Middle East, the war between Israel and Hamas shows no signs of abating,
with US-backed international mediation efforts failing to reach a ceasefire agreement so far.

However, demand-side uncertainty continues to affect sentiment as China faces economic challenges
and the US Federal Reserve adopts a cautious approach to interest rate cuts.

Core Inflation for Bank of Japan Grows, Surpassing the 2% Target Again

Core Inflation for Bank of Japan Grows, Surpassing the 2% Target Again

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