Tokyo area CPI data for January +1.6% (prior 2.4%)

<p>Two of the three measures have shunted back below the Bank of Japan 2% target. </p><p>Tokyo headline for January 1.6% y/y</p><ul><li>expected 2.0%, prior 2.4%</li></ul><p>CPI Excluding Fresh Food 1.6% y/y, the slowest for this measure since March 2022</p><ul><li>expected 1.9%, prior 2.1%</li></ul><p>CPI Excluding Fresh Food and Energy 3.1%, the slowest for this measure since February 2023</p><ul><li>expected 3.4%, prev 3.5%</li></ul><p>The obvious caveat on reading too much into this data is that its not national level CPI. But … that's unlikely to accelerate if Tokyo's is falling like this.</p><p>The "Excluding Fresh Food and Energy" is the closest measure to the US measure of core inflation, and that's still strong. Otherwise there isn't much in this data to support a Bank of Japan tightening. </p><p>USD/JPY is not showing a huge response. Yet. There is also not much in the data to support buying yen. </p><p>****</p><p>Tokyo area inflation data:</p><ul><li>National-level CPI data for this month will follow in about three weeks, it takes longer to gather and collate the national data.</li><li>Tokyo CPI is a sub-index of the national CPI</li><li>It measures the change in prices of goods and services in the Tokyo metropolitan area</li><li>Its considered a leading indicator of national CPI trends because Tokyo is the largest city in Japan and is a major economic hub</li><li>Historically, Tokyo CPI data has been just slightly higher than national Japan CPI data. The cost of living in Tokyo is a touch higher than in most other parts of Japan. Higher rents, for example</li></ul>

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