The Japanese Bureau of Statistics will release October inflation data globally early Friday in Asia, 23:30 GMT. The CPI or Tokyo Consumer Price Index used as a benchmark for the Japanese economy in terms of price pressures. 

The Tokyo Ex-Fresh Food CPI or known as Tokyo Core CPI, is getting a lot of love among the JPY (Japanese Yen traders) as the measurement of one of the favorite price for the BOJ (Bank of Japan).

Apart from the inflation data, the preliminary Japanese Industrial Production reading for September may also cheer USD/JPY traders up. The inflation data of Japanese, if not largely ignored, will likely get some attention.

It is because the Asian economic calendar is largely silent while the BOJ is also not giving a strong signal to join the European Central Bank and the US Federal Reserve. Estimates show the YoY figure cell further than -0.2% before -0.5%.

The Influence of Tokyo Core CPI on USD/JPY

Recently, although the US dollar supported the risk-off mood, the decline in USD/JPY is keeping control around monthly lows. As a result, the gloomy inflation can be ignored if the Yen rises on the table can be kept by industrial production.

However, it should be noted that if both scheduled data turn out to be disappointing, the pair’s latest pullback could be extended due to the bias from the BOJ’s bearishness. In a technical view, a clear break of the falling eight-day trend line.

Now, at 104.40, USD/JPY buyers can be directed short term towards the 105.00 thresholds. Though, further advances will be challenged by a three-week falling trend line, around 105.50 currently. Meanwhile, it is possible that new selling will be able to break the downside of the clear September low 0f 104.00.

CPI ex Fresh Food and Industrial Production of Japan

The Statistics Bureau releases the Tokyo Consumer Price Index which is a price movement obtained by a representative retail shopping basket of services and good excluding fresh food prices that measured. The inflation in Tokyo was captured by the index.

Inflation causes the purchasing power of JPY dragged down. For the JPY, a high reading is seen as positive generally. The industrial production issued by the Ministry of Trade, industry, and Economy measures outputs of the Japanese mines and factories.

In the manufacturing sector, industrial production’s changes to a large extent are followed as a leading indicator of strength. A low reading is seen as bearish while a high reading is seen as bullish.

Technical Outlook of USD/JPY for a Short-Term

The USD/JPY increase sharply as low as 104.02 after trading, at around 104.70 currently. During Asian trading hours, this pair got a moderate boost from the Bank of Japan because as anticipated, the monetary policy of the Central bank is left unchanged.

But, lowering growth forecasts and inflation for the current fiscal year. The pair later bounced on the back of upbeat US data during the American session and a modest rise on Wall Street but fell on risk aversion.

The US Treasury yields gave the additional support for this pair, which recovered well on unexpected increases in employment and growth figures. The benchmark 10-year note shows a daily high of 0.84%. The Tokyo October inflation will be published today by Japan.

And also the unemployment rate of September and the preliminary estimates of industrial production for the same month. The technical outlook of USD/JPY is neutral. The very unlikely scenario is that this pair can break at 106.10