November Data Gives Boost To Japan's War On Deflation, $USDJPY Above 104 (AFP+)

November data gives boost to Japan's war on deflation (via AFP)

Japan's war on deflation got a boost last month with a key inflation indicator rising at its fastest pace in 15 years, new data showed Friday, as Tokyo battles to reverse years of falling prices. Stripping out volatile food and energy prices, which…

It looks like the Bank of Japan is succeeding at destroying its currency. USDJPY just broke through 104 resistance on the chart, or at least pierced through that level. The pair actually rallied all the way to 105 just now.

Ever since the Bank of Japan started printing massive amounts of Yen, USD/JPY built a solid uptrend (yen downtrend) and hasn't looked back since. But if oil prices keep rising, fuel imports could become a serious tax on Japan's economy. "Abenomics" is betting that a cheaper yen will increase exports, economic growth and core inflation significantly, which will negate the deflationary effect of higher fuel costs.

Japan is being directly affected by the South Sudan conflict. According to AFP, "Robert Yawger, director of energy futures at Mizuho Securities, said South Sudan usually exports about 220,000 barrels a day to Japan, Malaysia and China." February oil is at $99.6.


Will USDJPY rally all the way to its 11 year downtrend?


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