Japan’s core consumer prices were unchanged in July from a year earlier, government data showed on Friday. The core consumer price index, which includes oil products but excludes fresh food prices, compared with economists’ median estimate for a 0.1 percent annual gain. Stripping away the effect of fresh food and energy, consumer prices rose 0.4 percent in July from a year ago. whereas the preliminary readings of the Jibun Manufacturing PMI gained beyond 45.2 previous readouts to 46.6.

“Core CPI is likely to stay largely flat towards next year,” said Yasunari Ueno, chief market economist at Mizuho Securities.

The latest chatters that Japan’s ease of corona virus (COVID-19)-led restrictions for foreign residents also helped the Japanese Yen. Japan plans to ease its COVID-19 entry restrictions on foreign nationals with resident visas starting next month, after an outcry over the emotional and economic hardship that the measures are inflicting. Re-entry will be permitted for visa holders, including permanent residents and exchange students, on condition that they undergo corona virus testing and quarantine for 14 days, the same policy that applies to Japanese citizens re-entering the country, reported on Friday.

The move ignores the Tokyo surge in virus cases for Thursday. As per the Kyodo News, “Tokyo reported on Thursday 339 additional cases of novel corona virus infection, topping the 300 mark for the first time since Saturday, the metropolitan government said.”

On the Other hand, On Thursday, the data published by the US Department of Labor showed that Initial Jobless Claims rose above 1 million after declining to 971,000 last week. Additionally, the Philly Fed Manufacturing Index dropped from 24.1 in July to 17.2 in August.

Elsewhere, the US House Speaker Nancy Pelosi said, “Timing is not right for a smaller corona virus relief bill.” The Democrat earlier showed readiness to cut the aid package amount demand in half to renew hopes of America’s much-awaited stimulus. Furthermore, American Secretary of State Mike Pompeo’s tough stand against Iran and no clarity over the US-China trade talk also play a role in the latest risk moves.

USD/JPY 4 Hour Chart:

Support: 105.62 (S1), 105.44 (S2), 105.15 (S3).

Resistance: 106.09 (R1), 106.39 (R2), 106.56 (R3).

The positive Japanese core consumer index and US initial jobless data drives Yen stronger than Dollar. We expect a bearish trend for USD/JPY.