USD/JPY Rises Tepidly Following Positive CPI and Employment Data

Talking Points:

• Japanese Yen was little changed after the jobless rate fell to its lowest level since 1993
• CPI rose 0.3% y/y in February; core inflation rose 0.2% y/y, the most since May 2015
• Japanese household spending saw its largest on-year decline since September 2016

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The Yen tepidly fell in the minutes following the release of February’s Japanese inflation and employment data, both of which exceeded analyst expectations.

The jobless rate fell to 2.8 percent in February from 3.0 percent in January, whereas analysts expected it to remain unchanged. The job-to-applicant ratio remained the same from the previous month at 1.43, failing to deliver the rise projected by economists. Japanese household spending saw its largest drop since September of 2016, at -3.8 percent year-over-year.

Japan’s national Consumer Price Index grew 0.3 percent y/y in February, beating analyst forecasts calling for 0.2 percent. Core consumer prices, the Bank of Japan’s target inflation measure, grew 0.2 percent. That was the strongest period of expansion since May 2015. The BOJ’s target for core CPI remains 2 percent y/y.