Japan CGPI

Actual 7.1%, Expected 5.7%, Previous 5.6%

Release Explanation: The Domestic Corporate Goods Price Index measures prices for goods purchased by Japanese corporations. As prices for input materials and the overall cost of manufacturing products change, companies adjust retail prices accordingly. Increases in the index often precede upward movement in the CPI. If an increase in the CGPI is followed by a rise in the CPI, concerns about inflation may prompt the Bank of Japan to raise interest rates.

Trade Desk Thoughts: The price seen in corporate goods in Japan jumped 7.1% on the year, which is growing at its fastest rate since 1981, said the Bank of Japan. Analysts had been expecting a 5.7% increase which was also higher than the June reading of 5.6%. There has been a rising trend for the past three releases. Many companies are having trouble trying to recover profits by just cutting costs alone, translating to higher prices paid by consumers as the corporations pass along the extra costs of business.

Forex Technical Reaction: The yen is currently holding above the critical 110 area which also corresponds to the neutral pivot point, after this release. The pair hit a roadblock today as it was unable to break above the 110.45 area for the past two trading days.

The LFB-Forex.com