Japanese PPI (Producer Price Index, previously known as the Corporate Goods Price Index (CGPI), measures the change in the selling prices of goods purchased by companies in Japan (in a nutshell)) has been up but its pass-through to consumer-level prices has been weak. The Bank of Japan has said, over and over again, that they view the current levels of consumer inflation as transitory. The implication for monetary policy, and again the Bank of Japan has said this over and over again (Bank of Japan Governor Kuroda repeated it yesterday), is it will remain very loose. There is much speculation in market chatter that the BOJ will soon back down on such loose policy (abandoning its Yield Curve Control). Despite the chatter, this is not imminent. The yen continues to weaken, driven by monetary policy divergence between the loose BOJ and tighter policy from other DM central banks, and also persistent short-covering from those positioned (long yen) for the (non-imminent) change in policy from the BOJ.
Also of note today is data from the National Australia Bank monthly survey of businesses. The twin headlines from this are business confidence and business conditions. Both dropped in May. Despite this they remained at above average levels:
This snapshot from the ForexLive economic data calendar, access it here.
- The times in the left-most column are GMT.
- The numbers in the right-most column are the 'prior' (previous month) result. The number in the column next to that, where is a number, is the consensus median expected.
