Tokyo core CPI rose to 2.7% year on year in September, against a consensus of 2.4%, according to investinglive, and the yen’s reaction was small. The figure, published at 08:30 in Tokyo today, compares with 1.8% in August and is the first reading above the Bank of Japan’s 2% target since January.
USD/JPY traded at 157.98 at 23:25 GMT on 1 October, five minutes before the release. The five-minute bar covering the print low 157.84 and closed at 157.86, about 12 pips or 0.08 per cent lower, and the pair was back at 158.01 by 00:15 GMT today.
The headline Tokyo CPI came in at 2.7% against a forecast of 2.5%, up from 1.9% in August. Core CPI matched the headline at 2.7% against 2.4%, and the gauge excluding food and energy rose to 3.0% from 2.0%, against a forecast of 2.5%. The prior figures are August’s as published; no revision was stated.
| Indicator | Consensus | Prior | Prior revised? | |
|---|---|---|---|---|
| Tokyo CPI | 2.7% | 2.5% | 1.9% | Not stated |
| Tokyo core CPI | 2.7% | 2.4% | 1.8% | Not stated |
| Tokyo CPI ex food and energy | 3.0% | 2.5% | 2.0% | Not stated |
All three measures beat the consensus forecast. The ex-food-and-energy gauge showed the biggest overshoot, at 0.5 percentage points above the forecast.
Services inflation accelerated to 2.3% from 1.4%. The phase-out of a water subsidy contributed to the rise, but the increase was broad rather than confined to that one item.
The breadth matters for the Bank of Japan, which raised its policy rate to 1.25% in September, a 31-year high. Economy Minister Kiuchi declined to comment on monetary policy but said Japan has no need for excessively loose policy now that it is out of deflation.
USD/JPY traded at 157.74 at 11:21 GMT today, down about 33 pips or 0.21 per cent from yesterday’s close of 158.08. The early dip after the release was shallow and reversed, so the later fall cannot be put down to the data.
The Bank of Japan meets on the 29th and 30th of October, when it will publish new quarterly forecasts.
The post Tokyo CPI jumps to 2.7%, beating forecasts; yen barely moves first appeared on Forextraders.com.