The CAD/JPY pair is dramatically higher after Japan’s inflation significantly increased than expected, supporting the greenback. As Japan’s annual inflation statistic approaches 128.00, the bank of Japan (BoJ) may be forced to sound neutral rather than advocate an ultra-loose monetary policy.

Markets are increasingly concerned that a more aggressive approach by major central banks to curb inflation could stifle global development. Extended COVID-19 lockdowns in China, as well as the Russia-Ukraine conflict, have fueled economic fears. As a result, risk sentiment deteriorated, forcing investors to seek refuge in traditional safe-haven assets, such as the Japanese yen.

Statistics Canada will release retail sales data for the country (on May 26, 2022).

The Canadian retail sales data shows the value of total retail sales in Canada. The reading includes the data acquired after sampling retail locations of various sizes.

The retail sales index is a leading economic indicator that predicts consumer confidence and future purchasing behaviour.

Rising statistics are generally bullish for the Canadian currency (CAD) and indicate a bullish market for the CAD/JPY pair in the foreseeable future and vice versa.

Conclusion

The positive trend for business opportunities supports the CAD/JPY, and the backend of support levels further enchants the pair.