Japan dominates Asia session with Tokyo CPI and BoJ decision ahead
Japan takes centre stage in Asia on Friday, with a heavy run of domestic data landing ahead of the Bank of Japan’s policy decision. The central bank is widely expected to keep its policy rate at 1.25%. A move in December remains a live possibility, so markets will focus on the tone of the policy statement and the quarterly Outlook Report rather than the decision itself.
Tokyo consumer prices for October arrive first, at 23:30 GMT (preview coming). Core inflation, which excludes fresh food, is expected at 2.6%, a touch below September’s 2.7% and still above the BoJ’s 2% target. Headline Tokyo CPI ran at 2.7% in September, while the measure excluding both food and energy stood at 3%. Because the Tokyo figures are an early read on nationwide price trends, they will feed directly into expectations for December.
September labour data lands at the same time. The jobless rate is forecast to hold at 2.5% and the jobs-to-applicants ratio at 1.18. At 23:50 GMT, preliminary industrial production is expected to rebound 1.3% month on month after a 2.4% drop in August. Retail sales are seen rising 3.3% from a year earlier, up from 2.7% previously.
The BoJ decision (preview coming) has no fixed release time, but the Outlook Report is scheduled for 03:00 GMT. Any signal on the timing of the next hike is likely to be the main driver for the yen and Japanese government bonds.
- BOJ preview: Daiwa sees hold, but 2% inflation call could open door to December hike
- BoJ preview: MUFG sees hold but a 2% inflation call, with two dissenters the key yen risk
- BOJ to hold at 1.25%, but Ueda signals further hikes toward neutral
- BOJ seen lifting rates to 1.50% in December as 69% of economists expect a Q4 hike
- BOJ reportedly may upgrade inflation forecast, hold rates steady at next week’s meeting
The ANZ-Roy Morgan consumer confidence gauge from New Zealand, last at 97.6, comes out at 21:00 GMT. Australia also has data on the slate. At 00:30 GMT, third-quarter producer prices are expected to rise 1.0% quarter on quarter, slower than the 1.3% gain in the second quarter. Private sector credit is forecast to grow 0.5% in September.
Japanese housing starts and construction orders close out the session at 05:00 GMT.
Bank of Japan Governor Ueda press confrence will follow all this at 0630 GMT
This article was written by Eamonn Sheridan at investinglive.com.