Tokyo area CPI data for November 2023 comes in way above the 2% BOJ target rate. Again.

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Tokyo area CPI data for November 2023 comes in way above the 2% BOJ target rate. Again.

The data release shows inflation dipping from October:

USD/JPY has jumped higher after this data. Inflation in Tokyo, while well above 2%, has come in slightly under estimates.

The expectations I had seen for the:

• CPI excluding fresh food & energy was 3.7%
• CPI headline was 3.0%

USD/JPY up around 15 points to circa 147.25

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As background to this I posted earlier that back on Friday November 24 we had the most recent national CPI reading, which showed core consumer price growth above the BOJ's 2% target for 19 consecutive months. The Bank of Japan insists inflation is transitory, due to cost-push factors driving it higher, and is waiting for wage growth to decide if demand-pull factors can cement inflation in place in a sustainable and stable manner. Three Bank of Japan policy board members have been in the media this and last week hosing down expectations of any pivot before the Spring wage talks:

• BOJ board member Noguchi said only a possibility the 2% inflation target is in sight
• BOJ's Nakamura says it'll be some time before easy money policy is changed
• Bank of Japan's Adachi denies speculation of ending negative interest rates
• BOJ official says yet to see positive wage-inflation cycle - easy policy to remain

These officials were responding to speculation in Japanese media of a change coming:

• Japan media: Groundbreaking for the end of BOJ negative interest rates has finally begun

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Tokyo area inflation data:

• National-level CPI data for this month will follow in about three weeks, it takes longer to gather and collate the national data.
• Tokyo CPI is a sub-index of the national CPI
• It measures the change in prices of goods and services in the Tokyo metropolitan area
• Its considered a leading indicator of national CPI trends because Tokyo is the largest city in Japan and is a major economic hub
• Historically, Tokyo CPI data has been just slightly higher than national Japan CPI data. The cost of living in Tokyo is a touch higher than in most other parts of Japan. Higher rents, for example

                This article was written by Eamonn Sheridan at www.forexlive.com.

Source: Tokyo area CPI data for November 2023 comes in way above the 2% BOJ target rate. Again.

forexlive.com