Japanese CPI data not expected to provide much clarity on potential for a July BOJ move

<p>Earlier this week we had the minutes of the Bank of Japan April meeting:</p><ul><li><a href="https://www.forexlive.com/centralbank/boj-minutes-show-belief-that-current-monetary-policy-easing-should-be-maintained-duh-20230620/" target="_blank" rel="follow" data-article-link="true">BOJ Minutes show belief that current monetary policy easing should be maintained (d'uh)</a></li></ul><p>There was nothing in the minutes to suggest an imminent reduction in easy policy and indeed last Friday's June meeting showed the same:</p><ul><li>Note that <a href="https://www.forexlive.com/centralbank/boj-announces-no-change-to-jgb-yield-curve-control-tolerance-band-as-widely-expected-20230616/" target="_blank" rel="follow">the BOJ again repeats it expects the pace of inflation to slow </a>from the middle of this Fiscal Year. This would be around September/October (Japan's Fiscal Year begins on April 1).</li></ul><p>Comments from BOJ officials and Governor Ueda are along the same lines. </p><p>Goldman Sachs economists, though, <a href="https://www.forexlive.com/centralbank/goldman-sachs-says-scope-for-japanese-yen-jpy-intervention-may-be-limited-20230622/" target="_blank" rel="follow">do expect an adjustment t</a>o the Yield Curve Control (YCC) in July.</p><p>Today we get CPI data for May from Japan, The Tokyo-area data out a few weeks ago indicated still elevated levels of inflation (elevated levels for Japan that is):</p><ul><li><a href="https://www.forexlive.com/news/tokyo-area-cpi-for-may-headline-32-vs-34-expected-20230525/" target="_blank" rel="follow" data-article-link="true">Tokyo area CPI for May, headline 3.2% vs. 3.4% expected</a></li></ul><ul><li><a href="https://www.forexlive.com/news/underlying-inflation-in-tokyo-hit-a-40-year-high-in-may-recap-20230526/" target="_blank" rel="follow" data-article-link="true">Underlying inflation in Tokyo hit a 40 year high in May – recap</a></li></ul><p>We'll be likely to hear comments out of Japan on the data after. I'll be tuned in to listen for clues of what we might expect from the BOJ in July (the meeting is July 27 and 28). My hopes for clarity are not high though. </p>

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