Japan’s Tokyo CPI inflation eases to 1.5% YoY in January
The headline Tokyo Consumer Price Index (CPI) for January rose 1.5% YoY as compared to 2.0% in the previous month, the Statistics Bureau of Japan showed on Friday.
Additionally, Tokyo CPI ex Fresh Food climbed 2.0% YoY in January against 2.2% expected and 2.3% in the prior month. The Tokyo CPI ex Fresh Food, Energy rose 2.0% YoY in January, compared to the previous reading of 2.3%, below than market consensus of 2.2%.
USD/JPY reaction to the Tokyo Consumer Price Index data
As of writing, the USD/JPY pair is down 0.17% on the day at 153.12.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.24% | -0.11% | -0.28% | -0.56% | -0.36% | -0.46% | -0.68% | |
| EUR | 0.24% | 0.13% | -0.05% | -0.32% | -0.12% | -0.23% | -0.44% | |
| GBP | 0.11% | -0.13% | -0.17% | -0.45% | -0.27% | -0.38% | -0.57% | |
| JPY | 0.28% | 0.05% | 0.17% | -0.27% | -0.08% | -0.21% | -0.39% | |
| CAD | 0.56% | 0.32% | 0.45% | 0.27% | 0.20% | 0.08% | -0.12% | |
| AUD | 0.36% | 0.12% | 0.27% | 0.08% | -0.20% | -0.11% | -0.31% | |
| NZD | 0.46% | 0.23% | 0.38% | 0.21% | -0.08% | 0.11% | -0.21% | |
| CHF | 0.68% | 0.44% | 0.57% | 0.39% | 0.12% | 0.31% | 0.21% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
This section below was published at 22:36 GMT as a preview of the Japan’s Tokyo Consumer Price Index (CPI) data
The Japan Tokyo CPI Overview
Statistics Bureau of Japan will publish its data for January on Friday at 23.30 GMT. The Tokyo CPI measures the price fluctuation of goods and services purchased by households in the Tokyo region, excluding fresh food, whose prices often fluctuate depending on the weather. The index is widely considered as a leading indicator of Japan’s overall CPI, as it is published weeks before the nationwide reading.
The Tokyo CPI ex Fresh Food, Energy is expected to show an increase of 2.2% YoY in January versus 2.3% prior, while Tokyo CPI ex Fresh Food is projected to show a rise of 2.2% YoY during the same period, compared to 2.3% in December.
How could the Japan Tokyo CPI affect USD/JPY?
USD/JPY trades on a negative note on the day in the lead up to the Japan Tokyo CPI report. The major pair loses ground as the US Dollar (USD) weakens amid worries about the Federal Reserve (Fed) independence and concerns over another US government shutdown.
If data comes in hotter than expected, it could lift the Japanese Yen (JPY), with the first upside barrier seen at the 100-day Exponential Moving Average (EMA) of 154.22. The next resistance level emerges at the January 26 high of 155.35, en route to the January low of 155.68.
To the downside, the January 29 low of 152.68 will offer some comfort to buyers. Extended losses could see a drop to the January 28 low of 152.18. The next contention level is located at the October 28 low of 2025 at 151.76.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
