Japanese CPI Dec: 0.8% YoY vs 0.4% expected

Ross J Burland FXStreet

Japan’s December CPI has been released.

Japan's core consumer prices rose 0.7% in December from a year earlier, government data showed on Friday. The core consumer price index, which includes oil products but excludes fresh food prices, compared with economists' median estimate for a 0.7% annual gain. Stripping away the effect of fresh food and energy, consumer prices rose 0.9% in December from a year ago.

"Inflation pressures remain absent there, with annual headline inflation expected to print at just 0.7%yr in December," analysts at Westpac explained ahead of the event.

Japan's CPI

Japan Dec Nationwide core CPI +0.7% YoY - govt (Reuters poll: +0.7%).
Japan Dec core-core CPI excluding fresh food, energy prices +0.9% YoY - govt. vs0.8% exp and 0.8% prior.
Japan Dec Nationwide overall CPI +0.8% YoY - govt vs 0.5% prior and 0.4% expected.

Description

The National 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. These volatile products such as food and energy are excluded in order to capture an accurate calculation. 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.

USD/JPY implications

The Bank of Japan is dovish and that is priced into the yen. Safe haven flows are more supportive than domestic data.

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.

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