Share:
  • Tokyo Core CPI eases to 2.3%.

  • US to release ISM Services PMI later today.

The Japanese yen has edged lower on Tuesday. In the European session, USD/JPY is trading at 147.08, down 0.10%.

Tokyo Core CPI softer than expected

Tokyo Core CPI, a leading indicator for nationwide inflation, climbed 2.3% y/y in November. This was down from 2.7% in October and below the consensus estimate of 2.4%. This marked the 18th consecutive month that Tokyo Core CPI has hovered above the 2% target, indicating persistent inflationary pressures. Tokyo’s headline inflation also slowed in November to 2.6%, down from 3.3%.

With inflation persistently above the 2% target, speculation is high that the Bank of Japan will have to tighten its ultra-loose monetary policy. The BoJ has pushed back against these expectations, insisting that the rise in inflation is due to cost-push factors and that higher wages are needed to ensure inflation is sustainable. This message was echoed on the weekend by Bank of Japan board member Asahi Noguchi, who said that sustained wage increases were needed to reach the 2% inflation target.

The Japanese recovery has been slow and that will provide a strong argument for the central bank to continue its massive stimulus, which is aimed at boosting economic growth. The BoJ holds its next meeting on December 18-19. The meetings have been garnering a great deal of attention, as investors await a shift in policy. I don’t expect any significant moves at the December meeting but the BoJ is not known for its transparency and likes to surprise the markets, which means that a change in policy, although unlikely, cannot be completely discounted.

The US releases the ISM Services PMI later today. The October print fell to 51.8, down from 53.6 and the lowest in five months. The PMI isn’t expected to show much change in November, with a consensus estimate of 52.0.

USD/JPY technical

148.77 and 147.72 are the next resistance lines.

146.48 and 145.96 are providing support.

USDJPY

Share: Feed news

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

EUR/USD consolidates gains above 1.0800, awaits Fed Minutes

EUR/USD consolidates gains above 1.0800, awaits Fed Minutes

EUR/USD is holding gains above 1.0800 early Wednesday, having hit two-week highs on Tuesday. The US Dollar remains broadly weak, despite a mixed market mood, as investors weigh Fed rate cut bets and US government shutdown risks ahead of the Fed Minutes. 

EUR/USD News

GBP/USD clings to gains above 1.2600, all eyes on FOMC Minutes

GBP/USD clings to gains above 1.2600, all eyes on FOMC Minutes

GBP/USD is holding the renewed upside above 1.2600 in early Europe on Wednesday. The pair continues to draw support from hawkish comments from BoE Governor Bailey and an extended US Dollar weakness. The focus now shifts to the Fed Minutes, BoE- and Fed-speak.

GBP/USD News

Gold price bulls turn cautious near 50-day SMA, one-week top ahead of FOMC minutes

Gold price bulls turn cautious near 50-day SMA, one-week top ahead of FOMC minutes

Gold price (XAU/USD) touches over a one-week high on Wednesday, albeit struggles to build on the momentum and remains capped near the 50-day Simple Moving Average (SMA) through the early European session.

Gold News

Bitcoin is 23% away from ATHs, but retail is still not here, why?

Bitcoin is 23% away from ATHs, but retail is still not here, why?

Bitcoin’s journey so far has been nothing short of shocking. From ETF approval to countries warming up to crypto regulation, the crypto landscape seems to have changed quite a bit.

Read more

Lots of dovish talk going around

Lots of dovish talk going around

The conversation around lower rates has been a theme this week after US data disappointed, Canada CPI came in soft, BoE Bailey offered up dovish comments, and China slashed rates.

Read more

Majors

Cryptocurrencies

Signatures