Today we get June national inflation data from Japan.
The indications from the June CPI data for the capital shows Tokyo CPI excluding Food, Energy hit 1.0% y/y, (from 0.9% the previous month). This measure of Japanese inflation is closest to the US ‘core’ CPI. More on the June Tokyo data is here:
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Yesterday we had the latest policy statement from the Bank of Japan:
In its accompanying Outlook report the BOJ made upward revisions to its inflation outlook:
- 2.3% & 1.4% in FY2022 and FY2023 respectively (prior forecasts, in the April Outlook report were 1.9% and 1.1%)
Of note from the Bank, inflation pressures are building (a little).
- Wage pressure likely to gradually strengthen as job market tightens
- Medium-, long-term inflation expectations heightening moderately albeit at a slower pace than for short-term expectations
- Underlying rise in inflation likely to push up inflation expectations, lead to sustained rise in price growth
- Inflation likely to gradually accelerate toward BOJ’s price target, though it will take time
Note that the Bank are still expecting CPI gains to be transitory, and thus my assessment is there is no imminent prospect of policy tightening. However, while there is no imminent prospect of tightening I did note yesterday that there is something for analysts in yesterday’s statement and report from the BOJ to pique their interest, renew their interest, in beginning to speculate on tightening. The first step in this, when it (eventually) comes is likely to be removing the 0.25% yield cap on 10-year JGBs (YCC).
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Apart from this we also get some ‘flash’ PMI readings, see the snapshot pic below.
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This
snapshot from the ForexLive economic data calendar, access
it here.
The
times in the left-most column are GMT.
The
numbers in the right-most column are the ‘prior’ (previous month)
result. The number in the column next to that, where is a number, is
the consensus median expected.