Tokyo Core CPI overview
Japan’s Statistics Bureau will release the August month inflation data on early Friday morning in Asia, 23:30 GMT globally. While Tokyo Consumer Price Index (CPI) is considered to be the benchmark of price pressure in the Japanese economy, Tokyo CPI ex-Fresh Food, popularly known as Tokyo Core CPI, gains much love among Japanese Yen (JPY) traders as one of the favorite price measures for the Bank of Japan (BOJ).
The Japanese inflation data, otherwise mostly ignored, is likely to gain attention after the US Federal Reserve Chairman announced longer-term easing bias in Jackson Hole speech.
Forecasts suggest a mild consolidation in the Tokyo CPI ex-Fresh Food (YoY) figure of 0.4% to 0.3% while signaling an upbeat Tokyo CPI data of 0.8% (YoY) versus 0.6% prior. It should be noted that the Tokyo CPI ex-Food and Energy figures may also recede to 0.5% from 0.6% on an annualized basis.
How could Tokyo Core CPI affect USD/JPY?
Bank of Japan’s dovish tone, coupled with the government’s support for early money policy and a readiness to offer fiscal support, signals further rise of the USD/JPY pair if the scheduled data fail to please the Japanese yen (JPY) traders. However, the losses could be limited in a case of mild changes in price pressures. It should be noted, however, that market’s wish to retrace the previous day’s risk-on sentiment, amid challenges to the US-China trade deal and uncertainty surrounding the American fiscal stimulus, may guard the yen major’s short-term upside.
Technically, an upward sloping trend line from July 01, at 106.70 now, followed by a 100-day SMA level of 107, could keep exerting downside pressure on the quote. Though, sellers are less likely to be convinced unless the quote slips below the monthly support line, currently around 105.55.
Key Notes
USD/JPY reverses sharply and jumps to tests weekly highs above 106.50
About the Tokyo CPI ex Fresh Food
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.
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
EUR/USD stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.