Trade Desk Thoughts - Japan National Core CPI

Japan National Core CPI Actual 2.4%, Expected 2.4%, Previous 2.4%

Release Explanation: CPI measures the average price of a fixed market basket of goods and services purchased by consumers, and therefore give an overall read of inflationary pressures. It is the most widely used inflation indicator of central banks, institutions, and Governments. It is used to calculate cost of living numbers for Government programs. Each regional central bank will have their own CPI target rate, and each will differ in line with the way they individually want to control the aspects of their own economies. As the most important indicator of inflation, CPI figures are closely followed by the Bank of Japan. Rising Consumer Prices may prompt the BoJ to raise interest rates in order to manage inflation and slow economic growth.

Trade Desk Thoughts: Japans consumer price index has exceeded 2 percent for the second month in a row as companies pass on the higher costs to the consumer. Core prices climbed 2.4 percent in August from one year earlier. Even though Japan is seeing the fastest rate of inflation the country has seen, an interest rate increase is not likely to happen as things should begin to moderate with the drop in oil and fuel costs. The Bank of Japan states that they have anticipated price declines and plan to keep rates unchanged throughout the current fiscal year.

Forex Technical Reaction: After being rejected from the 20 and 100 day SMAs earlier, the yen is oscillating around its neutral LFB pivot point at 106.30.

Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com

TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.

The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.