The yen was at the top of the pip hill last week! Can the bulls sustain the momentum this week?
Inflation numbers are up this week! Specifically, the Bank of Japan (BOJ)’s core CPI (y/y) will be printed tomorrow at 6:00 am GMT while Tokyo’s core CPI – a widely recognized leading indicator for the nation’s consumer prices – will be released on March 29 at 12:30 am GMT.
Recall that BOJ Governor Kuroda has hinted that the central bank isn’t comfortable expanding their stimulus further just to push prices higher.
Unfortunately, the pressure to help Japan’s inflation increases as the economy continues to print weak CPI numbers. It also doesn’t help that the latest meeting minutes showed central bank members in disagreement over the course of their policies.
The BOJ’s core CPI last came in at 0.5%, while Tokyo’s core CPI (y/y) is expected to maintain its 1.1% reading back in February.
Weaker-than-expected releases could increase pressure on the BOJ to increase their stimulus, so make sure you’re glued to the tube in case the numbers significantly hit or miss market expectations!
Thursday’s data dumpAs we saw in last week’s price action review, Japan’s data releases tend to have minimal effect on the yen’s prices when risk sentiment takes over the markets.
This week, the unemployment rate for February is expected to edge lower from 2.5% to 2.4% and the preliminary industrial production could show growth in its monthly reading (-3.4% to +1.0%) but weaken in its annualized version (+0.3% to -0.6%). Meanwhile, retail sales is expected to have strengthened from 0.6% to 0.9% from a year ago in February.
With no other major data releases scheduled during Thursday’s Asian trading session, it’s likely that yen bulls and bears will react to Japan’s economic reports.
Missed last week’s price action? Read JPY’s price recap for March 18 – 22!