Yen rallies across the board on inflation data as focus remains on Greece

The Japanese yen rallied across the board on Friday (26 June) helped by stronger than expected domestic data while inconclusive EU-Greek talks left the dollar little changed against majors.

The USD/JPY fell to 123.22 from the previous close of 123.62, adding to the 0.25% gain in the Japanese unit over the past two days.

Against the euro, the yen rose to a three-week high of 137.80 from the previous close of 138.54. Technically, the cross has broken the 14-day moving average and the downside barrier of an upward channel dating back to mid-April.

Down south, the EUR/JPY aims 137.0 as the next support and then 135.7, endorsed by the five-day simple moving average. One should look at 133 before deciding if the broad trend has turned downward. On the upside, 140.0 and 141.0 are the immediate levels to watch out for.

Tokyo core inflation for June came at 0.1%, lower than 0.2% in May but better than market expectations of no change in prices. Month-on-month, the price rise accelerated to 0.2% from 0.1%.

Overall household spending jumped 4.8% from a year earlier in May rebounding from a 1.3% slide in April and compared to market expectations of a rise of 3.4%. Meanwhile, the unemployment rate stood at 3.3% in May.

The GBP/JPY slipped to 194.04 from Thursday's close of 194.68, further distancing from the near seven-year high of 195.90 hit last week.

Meanwhile, the overall forex market focus remains on the ongoing Greek talks. The negotiations are expected to continue through the weekend as the deadline for Greece to pay back an IMF loan of €1.6bn is 30 June.

Greece Prime Minister Alexis Tsipras told European Union Leaders on Thursday in Brussels that any deal with creditors "must be viable and have adequate funding", according to a Greek official.