When is the Japan Tokyo CPI and how it could affect USD/JPY?

The Japan Tokyo CPI Overview

Statistics Bureau of Japan will publish its data for February on Friday at 23.30 GMT. The Tokyo CPI measures the price fluctuation of goods and services purchased by households in the Tokyo region, excluding fresh food, whose prices often fluctuate depending on the weather. The index is widely considered as a leading indicator of Japan’s overall CPI, as it is published weeks before the nationwide reading. 

The Tokyo CPI ex Fresh Food is projected to show a rise of 1.7% YoY in February, compared to 2.0% in January.

How could the Japan Tokyo CPI affect USD/JPY?

USD/JPY trades on a negative note on the day in the lead up to the Japan Tokyo CPI report. The major pair loses ground as the Japanese Yen strengthens amid hawkish signals from Bank of Japan (BoJ) officials.

If data comes in hotter than expected, it could lift the Japanese Yen, with the first upside barrier seen at the February 25 high of 156.82. The next resistance level emerges at the February 9 high of 157.66, en route to the January 23 high of 159.23.

To the downside, the February 25 low of 155.35 will offer some comfort to buyers. Extended losses could see a drop to the 100-day Exponential Moving Average (EMA) at 154.45. The next contention level is located at the February 16 low of 152.64.