When is the Japan Tokyo CPI and how it could affect USD/JPY?

The Japan Tokyo CPI Overview

Statistics Bureau of Japan will publish its data for September on Friday at 23.30 GMT. The Tokyo CPI measures the price fluctuation of goods and services purchased by households in the Tokyo region excluding fresh food, whose prices often fluctuate depending on the weather. The index is widely considered as a leading indicator of Japan's overall CPI as it is published weeks before the nationwide reading. 

The headline Tokyo Consumer Price Index (CPI) for August rose 2.6% YoY as compared to 2.9% in the previous month, while the Tokyo CPI ex Fresh Food, Energy rose 3.0% YoY in August versus 3.1% prior.

Tokyo CPI ex Fresh Food is expected to show a rise of 2.8% YoY in September, compared to the previous reading of 2.5%.

How could the Japan Tokyo CPI affect USD/JPY?

USD/JPY trade on a positive note on the day in the lead up to the Japan Tokyo CPI report. The major pair gains ground as the US Dollar strengthens following the upbeat US economic data, while Federal Reserve (Fed) officials gave mixed remarks regarding the Fed's rate path.

If data comes in hotter than expected, it could lift the Japanese Yen  (JPY), with the first upside barrier seen at the 150.00 psychological level. The next resistance level emerges at the July 31 high of 150.84, en route to the March 28 high of 151.21.

To the downside, the July 15 high of 149.02 will offer some comfort to buyers. Extended losses could see a drop to the September 24 low of 147.52. The next contention level is located at the August 29 low of 146.76.