🇯🇵Cable FX Macro Weekly Note: Japan August CPI

**As seen in Risk In The Week report 09/16/2022, cablefxm.co.uk/reports

Japan national consumer prices accelerated to 2.6% Y/y from the previous 2.4%. Headline CPI is heading closer to 3%, that would be a 1% gap to the BoJ’s inflation target, something not seen since 2014. The ex-fresh food and energy metric printed at 1.2%, up from the previous 1.0% Y/ y, while the core figure came at 2.6%. Utilities and household goods saw the largest upside moves, the former came in at 14.7% Y/y, 0.7pp faster than the previous. After this week's price data, the BoJ’s announcement on monetary policy will follow, desks are more likely to focus on meetings where the central bank publishes its macroeconomic projections given that the bank is determined to keep easy monetary conditions. The devaluation of the yen will be in center since the currency is set to close its worst year on record, the 2022 decline is circa 19.50%, only 1979 comes close after the yen fell by 19.16%. Analysts at Wells Fargo say the currency is likely to stay under pressure as the Fed is seen rising rates by 75bps, this could also feed into higher inflation in Japan as imports feed into broad prices. However, a lower yen could support exports' competitiveness and therefore the overall economy, they wrote.