Japan’s April month Retail Trade, Preliminary reading of Industrial Production and May month Tokyo Consumer Price Index (CPI) are among the data up for publishing amid the initial Asian session on Friday.
The earlier reading of the Tokyo Consumer Price Index (CPI), scheduled for release at 23:30 GMT on Thursday for the world, flashed a 0.2% mark in April and could ease further. Further, the Tokyo CPI ex Fresh Food, the key inflation gauge, might remain on the back foot around -0.2% versus -0.1% prior. Looking forward, Retail Trade could magnify the previous fall of 4.7% with -11.5% expected figures whereas Industrial Production could also shrink further by 5.1% versus -3.7% earlier reading.
Even if the recent comments from the Bank of Japan (BOJ) Governor reiterated the readiness to increase the monetary stimulus if needed, the importance of incoming statistics remains key for further decision making. It should also be noted that Bloomberg's report citing likely seven-year high bankruptcies by the Japanese firms could weigh on the USD/JPY if the data matches downbeat forecasts.
How could it affect the USD/JPY?
While the risk catalysts have recently been lighter, mainly due to the equities’ upbeat performances, the underlying fears aren’t yet wiped out. To convey the same, policymakers from the major central banks, including the BOJ remain cautious while showing readiness to accelerate the efforts to combat the coronavirus (COVID-19) if needed. As a result, downbeat results of the headlines economies could weigh on the Japanese yen (JPY).
Technically, buyers keep targeting the 108.05/10 area comprising multiple highs marked since April-19. However, a 200-day SMA level around 108.35/30 could keep the bulls checked then after. On the downside, a sustained break below an ascending trend line from May 13, near 107.40, could recall sellers targeting the mid-month low near 106.75 and the monthly bottom around 106.00.
Key notes
USD/JPY Forecast: Market keeps ignoring safe havens
USD/JPY Asia Price Forecast: Greenback trades off the May’s highs vs. Japanese yen
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. As this coiling up comes undone, investors can expect XRP to kickstart a massive rally.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.