The Japanese yen is strengthening, and the USDJPY pair has chugged again after the Kyodo news agency reported a negotiated 5% wage hike by Japanese unions. Traders are concerned that the Rengo negotiations could be the missing brick for the BoJ in a potential policy change. JIJI relayed that the Bank of Japan is now making its final analyses on how to exit the era of negative interest rates.
- Japan's annual wage hike was 5.28%, compared to 3.8% a year earlier, indicating the highest wage increases in more than 30 years. The minimum wage is set to rise 3.7% vs. 2.33% in 2023. Japan's Finance Minister Suzuki indicated that the government will do everything possible to ensure that wage increases continue and that deflation is no longer a problem in the country.
- Japanese prime minister Kishida informed about wage increases flowing strongly and positive trends in personal consumption. He also signaled that also consumer sentiments improvement, which makes moderate prices to rise. However, the Japanese policymakers stressed that the decision and interpretation of economic indicators rests solely with the BoJ.
USDJPY (M1)
USDJPY loses, however, final market reaction to today information is still unclear. If BoJ will be not very hawkish, markets may see it as a disappointment and weaken yen amid extremely dovish policy despite rising prices and wages.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
