Tokyo’s Core CPI broadly met market expectations, printing at 2.1% for the year through December

Highlights:

• Tokyo’s consumer price index cooled from 2.6% to 2.4% year-on-year.
• Tokyo YoY Core CPI comes in at 2.1%, as expected. This is down from 2.3% in the previous period.

The year-end inflation in Japan decreased further as the country’s major economic regions continue to experience cooling inflation. Annualized inflation in December 2023 was at 2.4%, down from 2.6% in November.

The core consumer price index in Tokyo was generally in line with market expectations, coming in at 2.1% in the year to December, as opposed to 2.3% in the previous month.

In Tokyo, the core-core inflation rate decreased to 3.5% from 3.6% in November.

The foreign exchange pair, the USD/JPY, is trading in a sedate manner in early Tuesday trading. It is maintaining its intraday highs around 144.00 handle.

The Tokyo CPI, which is released by the statistical agency of Japan, is a leading indicator of the country’s overall consumer price inflation. It is also released several weeks before the national reading. The YoY reading, which compares the prices of goods and services in the previous month with those of the previous year, is used to measure the changes in prices. A high reading indicates that the Japanese Yen is gaining strength, while a low reading suggests that it is experiencing a deflation.