FXStreet (Bali) – The Bank of Japan is introducing a new set of measures on its CPI, which is set to have a positive impact for upcoming readings, and as a consequence, may push the prospects for further easing further down the road.
As Bloomberg notes: “Starting this month, the BOJ will include CPI less fresh food and energy in its monthly data release. CPI excluding energy and fresh food is at 0.7% y/y, according to our (Bloomberg) calculations, which is much higher than a 0.1% reading for core CPI.”
Bloomberg argues that taking into account the present core CPI readings alone, which remain near zero, “the BOJ would have difficulty justifying staying on hold in October”, however, “with the focus shifting to the higher readings from the new index, staying on hold becomes easier to do”, Bloomberg adds.
Kuroda remains confident that inflation is still well on track to hit the 2% inflation mandate “sometime around the first half of fiscal 2016”, the Governor said earlier today.
(Market News Provided by FXstreet)