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The yen continues to outperform as still-low....>

YEN
YEN: The yen continues to outperform as still-low inflation rates keep real bond
yields supported in spite of extremely loose monetary policy. The yen has been
the best performing currency in Asia this week, in line with a view we put out
in 'JPY To Outperform Asian FX Even As It Struggles Versus USD' on Wednesday. 
- Today's CPI release showed no signs that inflation is taking off, with the
core-core rate (excluding fresh food and energy) coming in at just 0.3% y/y in
May from 0.4% in April. Breakeven inflation expectations continue to trend lower
as the BOJ fails to reverse the 'deflationary mindset'. 
- Japan 10-year inflation-linked bond yields have gradually risen since the
start of the year and are now close to their highest spread above Germany's
since 2012, which is helping keep the yen strong versus the euro as well as
Asian FX.

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