Tokyo headline CPI for December 2.4% y/y (prior 2.6%)

<p>Falling rates of inflation in the Tokyo area will likely translate to national CPI figures due in around 3 weeks. </p><p>The underlying rate of inflation, the core-core (ex food and energy), which is closest to the US measure of core inflation, remains well above the Bank of Japan 2% target and argues for a reduction in accommodative policy. </p><p>USD/JPY is barely changed on the data circa 144.20.</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><p>****</p><p>There was also data on household spending, for November:</p><p>-1.0% m/m</p><ul><li>expected +0.2% &amp; prior -0.1%</li></ul><p>-2.9% y/y</p><ul><li>expected -2.3%, prior -2.5%</li></ul>

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