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Japan National CPI ex Fresh Food (YoY) came in at 2%, above forecasts (1.8%) in August
Confirmed
In Short: Japan's core consumer price index hit the Bank of Japan's 2% target in August, boosting the yen and pushing gold prices higher.
Japan's core consumer price index excluding fresh food hit the Bank of Japan's 2% target in August, according to data released on Thursday. This figure exceeded forecasts and comes amid a week packed with central bank decisions, with the BoJ's meeting set to conclude on Friday.
The strong performance of the Japanese economy has bolstered the yen, leading to a recovery in its value. Gold prices have also climbed sharply, reaching fresh weekly peaks, though they face resistance around the $4,400 per troy ounce mark.
The Food and Drink Federation (FDF) warned that food inflation in the UK is expected to reach nearly 4% by Christmas and peak at 6.4% in July next year. This forecast reflects the impact of rising energy costs and extreme weather conditions on consumer prices.
Gas prices in the UK have more than doubled since February, while electricity prices are among the highest in Europe. Diesel prices have also risen by 28.6% since the start of the conflict in the Middle East, contributing to the overall increase in food costs.
Environment Secretary Dame Angela Eagle suggested households prepare for extreme weather by stocking up on food. She noted that El Niño will lead to more severe storms in the UK, adding to the challenges faced by consumers and manufacturers.
As traders await the BoJ's expected interest rate hike, the yen's strength has pushed the USD/JPY pair to catch some bids in the Asian session. The AUD/USD pair trades above 0.7100, reflecting softer US bond yields and a cautious stance on the US dollar.
Background
Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asian mainland, it is bordered to the west by the Sea of Japan, the Sea of Okhotsk in the north, and the East China Sea in the south.
What's confirmed
- Japan's core consumer price index excluding fresh food hit the Bank of Japan's 2% target in August, according to data released on Thursday. This figure exceeded forecasts and comes amid a week packed with central bank decisions, with the BoJ's meeting set to conclude on Friday.
- The strong performance of the Japanese economy has bolstered the yen, leading to a recovery in its value. Gold prices have also climbed sharply, reaching fresh weekly peaks, though they face resistance around the $4,400 per troy ounce mark.
- The Food and Drink Federation (FDF) warned that food inflation in the UK is expected to reach nearly 4% by Christmas and peak at 6.4% in July next year. This forecast reflects the impact of rising energy costs and extreme weather conditions on consumer prices.
- Gas prices in the UK have more than doubled since February, while electricity prices are among the highest in Europe. Diesel prices have also risen by 28.6% since the start of the conflict in the Middle East, contributing to the overall increase in food costs.
- Environment Secretary Dame Angela Eagle suggested households prepare for extreme weather by stocking up on food. She noted that El Niño will lead to more severe storms in the UK, adding to the challenges faced by consumers and manufacturers.
- As traders await the BoJ's expected interest rate hike, the yen's strength has pushed the USD/JPY pair to catch some bids in the Asian session. The AUD/USD pair trades above 0.7100, reflecting softer US bond yields and a cautious stance on the US dollar.
What's still developing
- The Bank of Japan’s monetary policy meeting will close a week packed with central bank decisions on Friday, with markets particularly interested in confirming expectations of a hawkish shift that has boosted a strong Japanese Yen recovery in September.
- The FDF, which represents 12,000 food and drink manufacturers, said “disruption is the new normal” because of geopolitical volatility, the impacts of climate change, and a “pile up” of regulatory costs around packaging and recycling reforms.
- The Food and Drink Federation (FDF) acknowledged that its figure was significantly lower than the 9% it predicted in April for the end of the year, but warned inflation was set to remain significantly above historical averages for the second half of next year rather than dissipate.
- A £100 grocery shop in January 2020 would cost £138.60 today – a rise of 38.6%, based on latest Office for National Statistics figures.