When is Japan’s Tokyo Core CPI and how could it affect USD/JPY?
|Tokyo Core CPI overview
Tokyo consumer price index (CPI) ex-fresh food, better known as Tokyo Core CPI, from Japan is up for release on 23:30 GMT. The Statistics Bureau will soon release the March month inflation data that has much love among Japanese Yen (JPY) traders as one of the favorite price measures for the Bank of Japan (BOJ). Forecasts suggest no change in the YoY figure of 1.1%. The reading comes from Japan’s largest populous city and signals an early indication of the national inflation figure, which gets released several weeks after the Tokyo reading.
How could Tokyo Core CPI affect USD/JPY?
While risk sentiment has been a major driver during the week, it’s wise to keep a tab on Japan’s inflation figures that are still far below the central bank’s 2.0% target. Despite repeated calls from some of the BOJ member to alter a cap of 2.0%, there prevails no change in the price target so far and hence a reading beneath the target could signal no change in the BOJ’s monetary policy easing. It should also be noted that majority of global central banks carry an easing or cautious monetary policy bias off-late, which in turn gives less room to the BOJ being a hawk even if the inflation figure surprises to the upside. Though, short-term strength in the JPY can't be denied on upbeat data.
That said, USD/JPY bounced off the 50-day simple moving average (SMA) and may target 111.20 (100-day SMA), followed by 111.50 (200-day SMA), if it can manage to conquer 110.80 upside barrier backed by upbeat data. Alternatively, a soft inflation gauge could drag the quote back to 50-day SMA level of 110.50 ahead of highlighting 110.30, 110.00 and 109.70 for sellers.
Key notes
USD/JPY eases from weekly highs, steadies near mid-110s
USD/JPY Technical Analysis: Greenback bulls en route towards 111.00 the figure
USD/JPY spikes to fresh weekly tops, 111.00 mark back on sight amid improving risk sentiment
About the Tokyo CPI
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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