*UPDATE* The Japanese YEN and Australian dollar (AUD) are now in freefall. With the YEN returning back to its 15 year lows. On the back of a China slowdown, which may turn into a recession. Food inflation is still sticky. *Update: RBA raises rate/s to 0.25% after April pause. AUD rallies. Central Banks return to tightening bias*

*UPDATE*  AUD spikes on 0.25% Aust cash rate now at 3.85%.  RBA terminal rate could be 4.25% and 4.50%.  

Chart 1

Chart 2

With inflation imbedded in the so called 'deflationary' country Japan and Australia which is a bellwether to a China slowdown.   Both currencies are now under pressure as their Central Banks are throwing in the towel on inflation, probably in lieu of China's economy and demand for raw materials slowing dramatically.   Will this send inflation further down?  Very good question, apart from the oil price, food inflation is still high in both countries.  

Chart 1 shows the YEN and AUST (AUD) futures, the slight rally in both currencies is coming to an end, as the YEN revisits its 15 yr lows (Chart 2).  Note red vertical support line since 2001 re: YEN