Japanese consumer price inflation likely to have slowed in March

Japanese headline inflation is expected to have slowed in March. According to a DBS Bank, the consumer price inflation is likely to have eased to 1.1 percent year-on-year from 1.5 percent recorded in February and 1.3 percent in January. Meanwhile, core inflation is likely to have stayed stable and remain low at 0.5 percent.

Food prices are expected to have dropped, owing to the end of the winter season and the normalization in weather conditions. Demand-driven inflation is expected to have stayed mild, as wage hikes continued to stay modest in the latest round of spring labor negotiations. Weak inflation figures, along with the trade-war concerns and the political scandals surrounding Prime Minister Shinzo Abe’s administration, would likely dissuade the Bank of Japan from raising the yield targets and ending the negative interest rate policy.

“Expect the BOJ to stand pat at the next policy meeting on 27 April”, added DBS Bank.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Japanese Yen was bearish at -97.3743, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -113.357. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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