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Japanese headline inflation likely to have remained unchanged in September

The Bank of Japan’s monetary policymakers continue to battle too low inflation. The consumer price inflation data for the month of September is set to be released this week. According to a Wells Fargo research report, the headline inflation is expected to have remained unchanged in the month.

In recent months, headline inflation has been volatile, while core inflation, which excludes fresh food and energy, has continued to remain below the central bank’s target of 2 percent. The Bank of Japan is set to meet at the end of this month for a meeting, which will include an update to the BoJ’s outlook for economic activity and prices.

The policymakers, in the July update, had downwardly revised their inflation projection for 2018 and noted the challenge of materially altering persistently low inflation expectations, stated Wells Fargo. There appear to be a few encouraging signs for higher inflation, such as accelerating wage growth in the midst of an increasingly tight labor market.

“Even were this scenario to spark faster inflation, however, the move higher would likely be a slow grind, as would any gradual removal of monetary policy accommodation by the BoJ”, added Wells Fargo.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Japanese Yen was neutral at 10.059, while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 95.8688. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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