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Japan's CPI rises to 2.7% in July
Japan's consumer prices rose to 2.7% in July, but core inflation slowed to 1.9%, the lowest since 2022.
Asian currencies strengthened, with the yen leading gains as the dollar eased before Fed Chair Powell's speech.
BOJ: Governor Ueda's hawkish remarks boosted the yen, despite mixed inflation data for July.
Markets anticipate another BOJ rate hike between October and December, following a July increase to 0.25%.
In Japan
Asian currencies strengthened as the dollar eased before Fed chair Powell’s upcoming speech. The Japanese yen led gains in Asia, continuing its upward trend from earlier in the week after BOJ Governor Kazuo Ueda made some hawkish remarks during a parliamentary hearing. These comments helped markets overlook the lukewarm inflation data for July.
Moreover, Japan’s key prices rose at a faster pace in July on the back of rising cost of living as Consumer data in Japan showed an increase to 2.7% in line with expectations and up from 2.6% in June.
Whilst the core figures excluding food and energy slowed to 1.9% from 2.2% to touch its lowest level for the first time since 2022.
Markets are now pricing in another BOJ hike supported by this data between October and December, with spotlight falling on the yen. The BOJ had ready raised its benchmark rates to 0.25% on July 31st noting the real rates remain significantly negative, signalling potential for further rate hikes.
In the US
Vice President Kamala Harris formally accepted her nomination as the Democratic nominee for the 2024 presidential race.
She stated that a primary focus of her presidency would be uplifting the middle class, pledging to implement a tax cut for this group while also enhancing housing and social care. Harris also emphasized gun control and reproductive rights, two key issues that have been central to her campaign as Vice President.
Stocks had a volatile session overnight, awaiting for clues from J.Powell.
