Japan’s National CPI rose 2.1% year on year in September, up from 1.9%, according to the Japan Statistics Bureau. The core measure excluding fresh food also increased to 2.1% from 1.8%, with the prior reading revised to 1.7%, and it matched consensus. A narrower gauge excluding fresh food and energy accelerated to 2.4% from 2.0%, after the earlier figure was revised from 1.9%.
Market Reaction To Inflation Data
In markets, the yen firmed after the release, with USD/JPY down 1.00% on the day at 156.55.
Measuring Inflation And Its Implications
Inflation is tracked through changes in the price of a representative basket of goods and services, typically reported on MoM and YoY bases, while core inflation strips out volatile items such as food and fuel. CPI is the standard measure used by economists and central banks, where readings above 2% are often associated with higher interest rates, a dynamic that can support a currency and raise the opportunity cost of holding gold.
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