Yen Barely Moves As Tokyo Inflation Rises To 2.8%

Tokyo's Consumer Price Index (CPI) excluding fresh food rose 2.6% from a year earlier in October, exactly as forecast, and USD/JPY has barely moved on it. It's trading in the lower part of the session's range, a little above a low set before the figures came out.

Headline inflation rose to 2.8% from 2.7%, but prices excluding fresh food and energy slowed to 2.6% from 3%, undoing two-fifths of September's full-point rise. The first adds to the case for a Bank of Japan (BoJ) hike that would narrow USD/JPY's rate gap, and the second takes from it. A Friday hold was widely expected before either came out.

Japan's jobless rate fell to 2.4% in September against a 2.5% forecast, and employers had 1.19 jobs on offer per applicant, up from 1.18. Both came out with the Tokyo figures, and USD/JPY had climbed further off its session low before any of them than it has moved since.

On the calendar

The BoJ's decision is due around 03:00 GMT on Friday with its quarterly Outlook Report, the first since September's hike. BoJ Governor Ueda's press conference follows at 06:30 GMT, and both bear on the pace of further hikes, the Japanese side of the rate gap.

The US Employment Cost Index (ECI) for the third quarter is due at 12:30 GMT on Friday, and the Chicago Purchasing Managers Index (PMI) follows at 13:45 GMT. Both feed the Fed's December decision, where a hike would widen the gap between US and Japanese rates.

On the charts

The session's range runs from a high just above 158.00 to a low just above 157.50, and USD/JPY has made back about a fifth of the slide between them. Intraday momentum has gone from oversold before the low to overbought on the climb.