Japan data – Tokyo headline CPI for June 2.3% y/y (vs. expected 2.2%)

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Inflation

Inflation

Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general price level where a given currency effectively buys less than it did in previous periods. Regarding valuation of the force or currencies, and by extension foreign currency, inflation or measures of it are extremely influential. Inflation stems from the general creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly rising. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster growth of the money supply in relation to the wealth produced (measured with GDP). As such, this generates a pressure of demand on supply that does not increase at the same rate. The consumption rate then increases, generating inflation. How does Inflation affect Forex? The level of inflation has a direct effect on the exchange rate between two currencies on several levels. This includes purchasing power parity, which tries to compare different purchasing powers of each. country according to the general price level. By doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate therefore loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interestation rates are also affected. Inflation rates, which are too high, push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.

Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general price level where a given currency effectively buys less than it did in previous periods. Regarding valuation of the force or currencies, and by extension foreign currency, inflation or measures of it are extremely influential. Inflation stems from the general creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly rising. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster growth of the money supply in relation to the wealth produced (measured with GDP). As such, this generates a pressure of demand on supply that does not increase at the same rate. The consumption rate then increases, generating inflation. How does Inflation affect Forex? The level of inflation has a direct effect on the exchange rate between two currencies on several levels. This includes purchasing power parity, which tries to compare different purchasing powers of each. country according to the general price level. By doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate therefore loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interestation rates are also affected. Inflation rates, which are too high, push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.
Read this Term data for the capital are available well ahead of the national CPI data. This will happen after about 4 weeks.

Tokyo CPI 2.3% y / y,

Tokyo CPI excluding Fresh Food 2.1% y / y,

Tokyo CPI excluding Food, Energy 1.0% y / y,

Governor of the Bank of Japan Kuroda is firmly in the provisional inflation camp, saying earlier this week that:

And:

  • monetary policy will continue to be accommodative (same link as just above)

If you like low rates, Kuroda is your man:

boj kuroda

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