Japan CPI is the key gauge for whether the country has moved from temporary price shocks to sustained inflation. It matters because BOJ policy normalization depends on inflation holding up alongside wages.
What to Check First
Reading the Signal
Japan's inflation signal is different from the U.S. or Europe. Energy and food can lift headline CPI, but the BOJ needs evidence that wages, services prices, and expectations support a durable 2% trend. Falling inflation is not automatically good if it revives deflation concerns.
Market Impact
Firm CPI raises BOJ hike expectations, supports the yen, and can lift JGB yields. Softer CPI can weaken the yen and pause normalization, but it may support equities if it lowers the risk of abrupt policy tightening.