Here are 3 previews of the CPI data due today from Japan (at 2300GMT)

But first - here is what's expected etc.:

Okey dokey ....

HSBC:

  • Japan's CPI rose 0.4% y-o-y in May, marking the fifth consecutive month of increase.
  • However, inflation is still well below the Bank of Japan's target of 2%, despite aggressive monetary easing.
  • The economic recovery and extremely tight labour market conditions are having limited transmission into domestic prices, as wage growth continues to be subdued. Inflation is likely remained stuck in June, as suggested by the June Tokyo CPI print.

Société Générale:

  • We expect June nationwide CPI (excluding fresh food) to continue growing at the +0.4% yoy pace observed in June.
  • As the economy continues to grow above the potential growth rate, a persistent state of excess demand is likely to take hold.
  • However, prices have yet to rise against a backdrop of falling energy prices, businesses managing to maintain high profit margins despite cost increases, continuing weak consumption after the consumption tax hike, the government push to lower mobile phone bills compounded by increasing competition among low-cost carriers. All of these downward pressures are starting to wane however.
  • Another factor likely holding back prices is the stagnant growth of rents, which carry a heavy weight in the CPI index. Rents tend to follow inflationary expectations and, as these have yet to pick up, it could be some time before rents start rising and contribute positively to price growth.

Barclays:

  • We estimate that nationwide core inflation (y/y) held at 0.4% in June, but believe the risks to this estimate are skewed slightly to the upside.
  • We forecast a gradual pick-up to a peak of 0.9% y/y in September-November, primarily due to base effects in energy components, but look for inflation to ease again after that.

I bolded a few points for emphasis. Soc Gen and Barclays are both looking ahead and seeing some inflationary pressure, which is what the BOJ want to see. But they do make the point that's the pressures will be slow to build.

And, just a note on Barclays - they point out the 0.4% core inflation (nationwide in June). The 'core' in Japan is CPI excluding fresh food, bit the measure most close to the US 'core' inflation is the Japanese 'core-core' inflation which excludes both food and energy. This was at -0.1% in June.