Japan is set to announce its February data on the Consumer Price Index. As the time for the release approaches, here are a few forecasts by researchers and economists of four banks regarding the country’s inflation data.
The headline is expected to breach 3.3% YoY, compared to 4.3% in January. The core CPI is expected to come in at 3.1% YoY, compared to 4.2% in January, and the Core CPI excluding energy, is expected to come in at 3.4% YoY, compared to 3.3% in the first month.
Standard Chartered Analysts Take
According to analysts at Standard Chartered, they expect the CPI to have expanded to over 3.3% year over year, a decline from 4.3% in January. The core CPI inflation that excludes fresh food and energy is also likely to have grown by 3.4% in February, which is higher than January’s 3.2%
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According to the analysts, the moderation in core CPI is partly due to the effect of oil prices. The Tokyo CPI inflation also saw an uptick of 3.4%. Remember that this is a very important metric indicator of the national CPI. The city’s core CPI inflation dipped to 3.3% from 4.4%. However, the core CPI also saw an uptick of 3.2% from 3.0%, indicating that the inflation is sticky and that the inflation figures may take longer to reach the intended 2% level.
ING Analysts Take
According to this group of analysts, Japanese consumer inflation will cool down to 3.25% YoY in the next figures, compared to 4.35% in January, due to the country’s subsidy programs assisted by the base effects of a slowdown in rate hikes.
Optimistic SocGen Analysts
The analysts from this firm believe that the core CPI of Japan will come in at 3.2%, a significant distance from the 4.2% YoY seen in January. However, the future is clouded with considerable uncertainty.
CitiBank’s Analyst Take
The analysts from Citibank predict 3.1%, which also falls from the previous 4.3%. According to the analysts, the CPI, excluding fresh food and energy, will come in at 3.4%, over the previous 3.2% in January. In addition, they reiterate the expectations of a nationwide core CPI measure to rise but fall to 2% YoY from autumn as the past increases in commodity prices deplete the yen.
The Eurozone Consumer Confidence Declines
According to recent reports, European consumer sentiment has weakened as the consumer confidence indicators have dipped to -19.2 in March from -19.1 in February. These numbers have come in weaker than the analysts initially anticipated at -18.3. However, this data has not significantly impacted the Euro’s performance against the six major currencies. The EUR/USD is trading at 1.0890, an uprise of 0.33%.
If the pair crashes through the 1.0900 level, it will be heading for fresh multi-week highs by the end of the week. Continuing this trajectory would see the pair meet resistance at 1.0929, and a breakthrough would see the pair challenge the 1.1032 level appearing on the short-term horizon.
For analysts looking at the long run, the view remains unchanged and well above the 200-day SA at the 1.1331 psychological price level. Despite the recent dip in consumer sentiment, experts suggest that the Euro will likely remain strong in the long run.