Introducing the Tokyo Core CPI
Japan’s Bureau of Statistics will release August inflation data early Friday morning in Asia at 11:30 p.m. GMT globally. While the Tokyo Consumer Price Index (CPI) is regarded as the benchmark for price pressure in the Japanese economy, the Tokyo Consumer Price Index excluding fresh produce, popularly known as the Tokyo Core CPI name, is gaining much love among Japanese Yen (JPY) traders as one of the preferred price measures for the Bank of Japan (BOJ).
Japanese inflation data, if not mostly ignored, is expected to attract attention after the chairman of the US Federal Reserve Board announced a longer-term easing bias in the Jackson Hole speech.
Forecasts suggest a slight consolidation of the Tokyo CPI excluding fresh produce (YoY) figure from 0.4% to 0.3% while signaling optimistic Tokyo CPI data of 0.8% (sliding annual) against 0.6% previously. It should be noted that the Tokyo CPI figures excluding food and energy may also decline to 0.5% from 0.6% on an annualized basis.
How could the core Tokyo CPI affect the USD / JPY?
The Bank of Japan’s dovish tone, coupled with government support for forward-looking monetary policy and a willingness to offer fiscal support, signals a further rise in the USD / JPY pair if the forecast data does not appeal to traders in the Japanese yen (JPY). However, losses could be limited if the price pressures change slightly. It should be noted, however, that the market’s desire to trace the sense of risk in the previous day’s market, amid the challenges of the US-China trade deal and the uncertainty surrounding the US fiscal stimulus. , could keep the yen major rising in the short term.
Technically, an uptrend line from July 1, at 106.70 now, followed by a 100-day SMA level of 107, could continue to put downward pressure on the quote. However, sellers are less likely to be convinced unless the quote slips below the monthly support line, currently around 105.55.
USD / JPY Reverses Abruptly, Breaks Weekly Tests Above 106.50
About Tokyo’s ex Fresh Food CPI
The Tokyo Consumer Price Index published by the Bureau of Statistics is a measure of price movements obtained by comparing the retail prices of a representative basket of goods and services, excluding fresh food. The index captures inflation in Tokyo. The purchasing power of the JPY is slowed down by inflation. In general, a high reading is considered positive for the JPY.