This morning (GMT time) we got three measures of core inflation calculated by the Bank of Japan (data for February, Figure 1), and the diffusion index (measuring breadth of change) for items in the inflation basket - Figure 2. All data are heading in the right direction.
Figure 3 shows the basic series of headline and core inflation for both the entire country and the Tokyo region.
On Thursday, we will get inflation in the Tokyo region for March. Tokyo CPI is seen cooling a touch to 2.4% (prev. 2.5%). Staying with Japan, on Wednesday we will get the BoJ Summary of Opinions (SOO) from last week's BoJ meeting. May be interesting given the once-in-a-generation shift in policy.. as the BoJ exited its negative interest rate policy and abandoned YCC (yield curve control). Additional hikes are of course on the table, however in the more “regular” cycles like in the USA, rate increases are good for stock markets... But rate hikes in Japan... who knows... 😊 the last time the BoJ raised rates, it was quite “a good leading indicator” of an impending global recession.
On Friday we will get the most important US PCE inflation print, but the stock and bond markets will be closed (Good Friday) - nevertheless the FX market will be open... so we will look at the reactions there...
Interestingly, Powell suggested during the presser that core PCE inflation may be "well below 30 bps"... perhaps a nice surprise awaits us... Wall Street expects +0.3% MoM, Cleveland FED inflation nowcast also indicates +0.3% MoM.
This week we will also get the inflation for March in some European countries: France (Friday), Italy (Friday), Poland (Friday) and in Spain (Wednesday). For the entire euro zone and other European countries, inflation data for March will be released next week.
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