It seems that Japan comes out of a 30-year battle with a deflation driven by an economy expanding at a pace above its potential growth rate. After saying, the strength of today’s edition of Japanese February industrial production data at the level of 2.5% y/y cannot be considered a firm signal of the accelerating trend of activity, notes that FX analyst Rabobank Jane Foley.

USD/JPY will probably end the lower year

“It is widely assumed that the fastest monthly data on the growth of Japanese production for almost a year was associated with the desire to satisfy the strong demand for produced products, such as the car, before the new US tariffs for this sector influenced this sector. Last week, summary of the opinion at the March meeting of the BOJ policy Economic and Household farm. ”

“Tariff fears clearly have an impact on the expectations of the Bij policy indicators. Although economists survey indicate the preference for July for the next 25 pp BOJ rates, the market suggests that politics rates suggest that subsequent movements will not be fully valued at negotiations with liquidation from liquidation from the liquidation of opposite against opposite by the opposite of the US president. The significant range of both uncertainty and market variability remains. ”

“In recent weeks, JPY has returned some of this year’s profits with tariff fears, probably contributing to this movement. Despite withdrawal, our main view is that USD/JPY will probably end the lower year. We maintain the forecast of the year at the end/JPy 145 and notic the risk of drops.”