The Japanese Yen stops the strengthening which has been happened for the last two days. The US dollar is finally rising for about 0.3 percent around the level of 110.20 to that currency. 

That was happened in the Asian trade session yesterday on Friday. It was after the Central Bank of Japan or the BOJ told their policy meeting result to the market participants. 

Yesterday morning, that institution decided to maintain the short-term interest rate to still in the level of -0.1%. That is based on the market expectation. BOJ also continues the obligation purchase. 

That program is in line with the 10Y Japan’s Government Yield Obligation target in the level of 0%. However, at the same occasion, they also Decline the Japan’s GDP prediction. 

BOJ Increases the Inflation Prediction

The GDP prediction which was declined is for the 2021 fiscal year from 4% to become 3.8%. To replace that, the central Bank rises the 2022 fiscal year economy growth from 2.4 to 2.7%.

That comes with the expectation that the public consumption also increases after the vaccination programs are accelerated properly. BOJ also increases the Inflation prediction. 

That is from 0.1% to become 0.6%. However, it is only for those which are caused by the energy price increase and the commodities that are volatile. That is for the price and salary solid growth in the Country. 

The Japan’s economy has a possibility to be better than before. It is in line with the decreasing effect of the pandemic which is happened gradually. The cause is the vaccination progress. 

The Outlook is Still Not Stable

It is a fact that the outlook is still not stable. That is caused by the domestic and foreign economy that can be shaken because of the development due to this pandemic situation. 

Market is not welcoming the BOJ announcement warmly. The Japan’s GDP projection must be revised because of the emergency status extend in several areas, included Tokyo. 

The aim is to handle the COVID-19 pandemic. The Nikkei 225 index felt off almost 1 percent. Meanwhile, the Topix was also slipped by 0.4%. The Japanese Yen is weaker vs the major currencies. 

When this news was released, the GBP/JPY was stronger almost 0 5% and the EUR/JPY increased by more than 0.2%. Japan is now having the slower 2021 economic growth projection. 

The China’s GDP is Also Lower

On Thursday, the National Statistical Bureau of China published the growth data of 7% year – over – year. That was happened in the second quarter of this year or in 2021.

This number is a little under the economist expectation for an 8.1% growth. That also declines quite significant than the past quarter increase which reached the 18.3% in the market. 

The slowdown in GDP data this time does not necessarily reflect the deteriorating economic conditions. The reason is that the decline is more due to the annual adjustment.

It is as China's economy begins to rebound from the impact of the pandemic in the second quarter of last year. This was confirmed by the GDP data which rose from 0.4% to 1.3% on a quarterly basis.

China has Made their Target

The number stated above is better than the expectations of a 1.2 percent increase. After growing by 2.3 percent last year, China has set an economic growth target above 6% for 2021. 

The Analysts estimate that growth could easily exceed that target and surpass the 8% figure this year. Apart from the GDP above, the Retail Sales China also released this morning.

It experienced a 12.1% increase on an annual basis, continuing a positive trend after a 12.4 increase in May. Other economic data such as the Industrial Production rose by 8.3%.