USD/JPY HAS RISEN IN THE FIRST HOUR AFTER THE LAST THREE US CPI REPORT RELEASES BY AN AVERAGE OF 0.57% – MUFG

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The performance of USD/JPY will be driven today by the release of the latest US Consumer Price Index (CPI) report for February, economists at MUFG Bank say.

Another upside inflation surprise would more seriously challenge the Fed’s outlook for inflation to continue to slow

After the upside inflation surprise in January, the February CPI report could prove even more important for Fed rate cut expectations and the US Dollar. Another upside inflation surprise at the start of this year would more seriously challenge the Fed’s outlook for inflation to continue to slow.

Looking back at the performance of USD/JPY just after the release of US CPI reports, there has been a clear trend for USD/JPY to strengthen in recent months. USD/JPY has risen in the first hour after the last three US CPI report releases by an average of 0.57%. The biggest move was after the last US CPI report released in February when USD/JPY rose by 0.73%. 

The Bloomberg consensus forecast is expecting core CPI to increase by 0.3% MoM in February after the firmer print of 0.4% MoM in January which would bring it back more into line with the average rate during the 2H of last year.

 


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