That was the magic quantity put ahead by Rengo, Japan’s largest union group, coming into this 12 months’s spring wage negotiations. It was an formidable one however no less than it helped to ship one more sturdy common wage hike on the finish of the day. It is the second 12 months working now that Japan has seen a median wage hike above 5% no less than. However given the backdrop, yen bulls have been definitely hoping for higher.
USD/JPY day by day chart
The narrative coming into March was that the BOJ goes to make use of the outcomes of the spring wage negotiations as a vital base to construct their case for the following price hike. If the numbers delivered as anticipated, merchants have been even contemplating a possible price hike in Might subsequent.
However with this information right here, it appears to be like like that may be off the desk.
All that being mentioned, the 5.46% wage hike within the first-round is nothing horrible nor does it derail the BOJ’s goal. And so the query now could be how does the BOJ wish to use that to suit their agenda?
As at all times, typically it isn’t what the markets suppose that issues most however it’s how central banks wish to spin the story. And as merchants, we will solely learn the tea leaves and hear.
At first look, this should not compel the BOJ to swiftly chase the following price hike. However I’d be remiss to not warn in regards to the chance that they could simply not care and keep on with the thought of placing a optimistic spin on the outcomes of the spring wage negotiations.
In any case, USD/JPY is now as much as round 149.00 on the day nevertheless it’s robust to see this translate to a lot heavier features given the present BOJ pricing; no less than not by itself.
