Japan CPI data for May has arrived as follows:
- Headline inflation 0.7% year/year, in line with expectations, from 0.9%year.
As analysts at Westoac note, “the Bank of Japan held steady yesterday as expected but faces a challenge as the 10-year JGB yield falls to -0.17%.”
About the National Consumer Price Index and FX implications
The National Consumer Price Index released by the Statistics Bureau is a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services. These volatile products such as food and energy are excluded in order to capture an accurate calculation. CPI is the most significant way to measure changes in purchasing trends. The purchase power of JPY is dragged down by inflation. Generally a high reading is seen as positive for the JPY.
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