Tokyo Core CPI overview
Japan’s Statistics Bureau will release the November month inflation data on early Friday morning in Asia, 23:30 GMT globally. While Tokyo Consumer Price Index (CPI) is considered to be the benchmark of price pressure in the Japanese economy, Tokyo CPI ex-Fresh Food, popularly known as Tokyo Core CPI, gains much love among Japanese Yen (JPY) traders as one of the favorite price measures for the Bank of Japan (BOJ).
Forecasts suggest a mild recovery in the Tokyo CPI ex-Fresh Food (YoY) figure of 0.5% to 0.6% while signaling no change in the headlines Tokyo CPI data of 0.4% (YoY). Further, October month Unemployment rate, expected to remain unchanged at 2.4%, coupled with the preliminary reading of October month Industrial Production will also decorate the Japanese economic calendar at the same time. The Industrial Production bears market consensus of 1.9% (YoY) growth versus 1.3% prior while also likely to register a contraction of 2.1% on a monthly basis compared to 1.7% previous readouts.
How could Tokyo Core CPI affect USD/JPY?
Bank of Japan’s dovish tone, coupled with the government’s support for early money policy and a readiness to offer fiscal support, signals further rise of the USD/JPY pair if the scheduled data fail to please the Japanese yen (JPY) traders. However, the losses could be limited amid the present risk-off environment, mainly due to the trade/political tussle between the United States (US) and China.
Technically, an upward sloping trend line since August 01, at 109.60, followed by May-end top near 110.00, could keep exerting downside pressure on the quote. With this, sellers can anticipate the return of mid-month levels surrounding 108.30/20 if prices slip under 109.00 figure.
Key Notes
USD/JPY Technical Analysis: Set to rise to the 111.00 handle
About the Tokyo CPI ex Fresh Food
The Tokyo 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, excluding fresh food. The index captures inflation in Tokyo. 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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