The Japanese Yen is the best-performing currency due to the Bank of Japan fueling speculation of a rate alternation. Additionally, over the past week, the Japanese Yen’s performance has improved due to investors fearing the Japanese Federal Government may intervene again as the Yen declined. The Japanese Yen opened on a bullish market gap during this morning’s Asian session against all currencies. For example, the US Dollar opened on a price gap against the Yen measuring a whopping 0.55%.
In addition to the Yen, the global stock market performed well during this morning’s Asian and Futures session. The positive price action amongst stocks is due to the Dollar weakness and the positive Chinese Inflation. The Chinese Consumer Price Index is a relief for investors due to the high risk of deflation. Deflation is known to significantly damage economic growth and increase the risk of a recession. The CPI rose 0.1% in August, which is higher than -0.3% in July. The global stock market’s reaction has been positive as the CPI data lowers the risk of deflation but continues to show signs the government needs to push on with fiscal stimulus. Fiscal stimulus is again usually deemed as positive for the stock market.