Japan CPI Dec: Beats expectations, arrives 1.2% YoY vs expected -1.3%

Japan Consumer Price Index for December arrived aT 1.2% YoY vs the expected -1.3%.

• Ex fresh food (YoY) Dec: -1% (est -1.1%, prev -0.9%).
• Ex fresh food, energy (YoY) Dec: -0.4% (est -0.4%, prev -0.3%).

The yen is unchanged on the release despite the upside surprise. the Bank of Japan is not on the verge of rasing rates.

However, in an upbeat tone, the BoJ concluded in its meeting yesterday that weaker growth at the end of the current fiscal year and a government stimulus package announced last month will result in a stronger rebound in the financial year starting April.

There was an upgrade in the fiscal 2021 growth forecast, from 3.6% to 3.9%, but it is likely due to a rebound, and markets do not see it as a sign of optimism or a signal of policy tapering to come.

Description of CPI

The National 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.

CPI is the most significant way to measure changes in purchasing trends. The purchasing power of JPY is dragged down by inflation. Generally, a high reading is seen as positive for the JPY.