JPY: Inflation data disappoint the BOJ – Nomura

By FXStreet Yujiro Goto, Research Analyst at Nomura, notes that the Japanese core CPI inflation slowed to 0.0% y-o-y in January, from +0.1% the previous month.

Key Quotes

“Although Japanese core CPI inflation recovered in Q4 last year, it slowed again to 0.0%. Core CPI, which excludes food and energy, also slowed to +0.7% y-o-y from +0.8%. More importantly for the BOJ, its new core CPI measure which excludes fresh foods and energy slowed to +1.1% y-o-y from +1.3%, for the first time since January 2015.

In its January statement, the BOJ argued that the underlying trend in inflation has been rising steadily, but the fall in the BOJ’s new core CPI suggests the underlying inflation trend is now likely weakening. The BOJ’s new core CPI adds food excluding fresh foods to core CPI inflation (which excludes all food and energy), and CPI-based food excluding fresh foods has been accelerating, supporting the BOJ’s new core CPI.

However, January’s CPI data showed that CPI food excluding fresh foods slowed to +2.11% from +2.31% the previous month, for the first time since July 2015. Import food prices, which tend to lead CPI-based food inflation by 6-12 months, have entered negative territory. Import food price inflation …read more

Source:: FX Street