Tokyo Consumer Price Index (CPI) Overview
The Tokyo Consumer Price Index (CPI) for September has shown a rise of 2.2% Year-over-Year (YoY). This is a slight decrease from the previous reading, which had a 2.6% increase. When we exclude Fresh Food and Energy from the equation, the Tokyo CPI increased by 1.6% YoY, remaining consistent with the previous reading.
Breaking it down further, the Tokyo CPI excluding Fresh Food specifically rose by 2.0% YoY in September, compared to a 2.4% rise in August. This aligns perfectly with the market consensus of a 2.0% increase.
Market Reaction to the Tokyo Consumer Price Index
Currently, the USD/JPY pair is up by 0.19% on the day, trading at 145.10.
Inflation FAQs
What is Inflation?
- Inflation measures the rise in the price of a representative basket of goods and services over time.
- Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis.
- Core inflation excludes volatile elements like food and fuel, focusing on a stable measure.
How does Inflation Affect Currencies?
- Higher inflation leads to higher interest rates, making a currency stronger.
- Lower inflation can weaken a currency as interest rates decrease.
- Central banks raise interest rates to combat high inflation, attracting global capital.
Investment Implications of Inflation
- Gold historically preserved value during high inflation periods.
- Higher interest rates, a result of combating inflation, can be negative for Gold.
- Lower inflation tends to be positive for Gold as interest rates decrease.
Understanding the implications of inflation and its impact on currencies and investments is crucial for financial decision-making.