Japanese data dump, headline CPI: +0.8 PCT YoY (beats 0.4% expected/prior)

Core consumer prices in Tokyo rose 0.6 per cent in November
Japanese government says there is a weakness in industrial production.
Eyes on trade wars between China and the US which is dictating the path of the yen.

Ross J Burland FXStreet

The final business day of the month brought the usual flurry of Japanese data. November Tokyo Consumer Price Index, Oct Unemployment and Oct industrial production.

The data arrived as follows

Core consumer prices in Tokyo rose 0.6 percent in November from a year earlier, government data showed on Friday. The core consumer price index for Japan’s capital, which includes oil products but excludes fresh food prices, compared with economists' median estimate for a 0.6 percent annual rise.

Tokyo area November core CPI +0.6 pct YoY - Govt. (Reuters poll: +0.6 pct)
Tokyo area Nov overall CPI +0.8 pct YoY vs 0.4% expected/prior.
Tokyo area Nov cpi excluding fresh food, energy prices +0.7 pct YoY.

Description

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 purchasing power of JPY is dragged down by inflation. Generally, a high reading is seen as positive.

Oct Unemployment and Oct industrial production

Japan Unemployment rate for October: 2.4% (expected 2.4%).
Job to applicant ratio (October), comes in at 1.57 vs expected 1.56, prior 1.57.

Description

The Unemployment Rate which comes from the Ministry of Health, Labour and welfare and it's published by the Japan Statistics Bureau, is a measure of the percentage of unemployed in Japan. A high percentage indicates weakness in the labour market which influences the strength and direction of the Japanese economy. Therefore, a low percentage should be taken as positive or bullish for the JPY.

Japan government says there is a weakness in industrial production.

Japan oct industrial output -4.2% MoM – Japan Oct industrial output was expected -2.0% MoM, vs prior 1.7%.
Japan manufacturers see Nov output -1.5% MoM (prev forecast: -1.2%).
Japan manufacturers see Dec output +1.1% MoM.

Description

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.

FX implications

The yen is on the back foot, despite the fragility of trade talks between the US and China. Next week will be crucial as the start of the month and the build-up of expectations for a so-called phase one deal between the US and China, especially in light of the recent escalation of antagonistic moves from Washington with the recent signing of the Hong Kong bills – more on that here: USD/JPY is vulnerable to a full market response to Trump's signing of Hong Kong Human Rights Democracy Act

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.