When is Japan’s National CPI data and how could it affect USD/JPY?

Overview

A step ahead of Friday’s Tokyo open, 23:30 GMT elsewhere, Japan’s Statistics Bureau will publish November month National Consumer Price Index (CPI), National CPI ex Food and National CPI ex Food, Energy. The headline inflation data is likely to direct immediate USD/JPY moves amid growing concerns on the Bank of Japan’s (BOJ) 2.0% inflation target.

The forecast suggests no change in headlines National CPI of 0.2% while CPI ex Food may increase to 0.5% from 0.4% whereas CPI ex Food, Energy is expected to soften to 0.6% from 0.7% earlier readout.

Thursday’s BOJ presser from Governor Haruhiko Kuroda differs from what the key economic adviser to Japan's Prime Minister Shinzo Abe thinks as far as the inflation is concerned. While the former wants to stick to bank’s 2.0% target, the later warns of such a situation.

How could it affect USD/JPY?

Given the expectations of no change outcome from the headlines inflation data, USD/JPY could easily shrug off the release in case of no surprises. However, a downside surprise will offer additional strength to the pair especially during the current risk-on times when the passage of USMCA (United States Mexico Canada Agreement) and positive headlines from the Brexit front have recently started rolling in.

Technically, anything above 109.75/80 needs to cross 110.00 to aim for the May month top surrounding 110.70. In absence of which, 108.40 can limit the pair’s near-term declines.

Key notes

USD/JPY printing fresh corrective lows, its downside one to watch for start of 2020

USD/JPY Forecast: Nearing critical 108.90 support

About the National Consumer Price Index

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 purchase power of JPY is dragged down by inflation. Generally a high reading is seen as positive for the JPY.