Yen strengthens after slightly stronger than expected Japanese data

Deflationary pressures in Japan worsened a tad in May, alongside a larger drop in household spending.

Core consumer prices as measured by the country´s CPI excluding fresh food prices, the Bank of Japan´s preferred gauge, dropped in year-over-year terms for a third straight month.

They fell by 0.4% following a 0.3% drop in March, in-line with market forecasts.

A gauge of underlying inflation pressures in Tokyo, a lead indicator for nation-wide prices, dropped by 0.5% year-on-year, for a sixth consecutive monthly fall.

On the activity side of the equation, Japanese household spending shrank by 1.1% year-on-year in May, also as expected.

The unemployment rate was unchanged at 3.2% in April, the Ministry of Internal Affairs and Communications said.

On a more positive note, short-term confidence among large Japanese corporates improved from a reading of +4 in March to +6 in June, the BoJ´s Tankan survey revealed.

Despite that, as of 09:19 BST dollar/yen was down by 0.57% to trade at 102.61.