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Japan’s November month Retail Trade, Preliminary reading of Industrial Production and December month Tokyo Consumer Price Index (CPI) are among the data up for publishing amid the initial Asian session on Friday.

The earlier reading of Tokyo CPI, scheduled for release at 23:30 GMT of Thursday for the world, is expected to come in a bit softer at 0.6% against 0.8% prior. Further, the Tokyo CPI ex Fresh Food, the key inflation gauge, might remain unchanged at 0.6%. Looking forward, Retail Trade could reverse -14.4% prior drop to +4.6% whereas Industrial Production could also improve to 0.9% from -7.7% earlier plunge.

The recent comments from the Bank of Japan (BOJ) Governor increase the importance of incoming statistics as the decision-maker shows readiness for further monetary policy easing if needed.

How could it affect the USD/JPY?

Although the recent market conditions are favorable to the riskier assets, dimming prospects of the Japanese yen’s (JPY) safe-haven allure, improvement in the key data will help the USD/JPY witness a pullback from the familiar territory near the multi-month high. It should also be noted that sustained weakness in the key economics might not refrain from fueling the quote beyond key resistances.

Technically, a sustained break beyond 109.75/80 will be the key to aim for 110.00 and May month high surrounding 110.70. Until then, expectations of pair’s pullback to 200-day Simple Moving Average (SMA) level of 108.71 are high.

Key notes

USD/JPY holds at near session highs, yen weakest as US stocks score fresh records

USD/JPY Forecast: Bulls preparing for a breakout

About Tokyo CPI

The Tokyo Consumer Price Index is released by the  Statistics Bureau  and it’s a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services. The index captures inflation in Tokyo. 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.

About Japan’s Retail Trade

The Retail Trade released by the  Ministry of Economy, Trade and Industry  captures the aggregate sales made through a business location (usually a store) in which the principal activity is the sale of merchandise and related services to the general public, for household or personal consumption. Consumer spending is a key important indicator for the Japanese economy. A high reading is positive for the JPY, while a low reading is negative.

About Japanese Industrial Production

The Industrial Production released by the  Ministry of Economy, Trade and Industry  measures outputs of the Japanese factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. A high reading is seen as bullish for the JPY, whereas a low reading is seen as bearish.