The key underlying core-core CPI YoY rate slowed from 4.0% to 3.8%, which was the lowest rate since March.

The key question is whether helped by wage inflation, Japan can experience stronger demand-pull inflation that helps bring about more sustained inflation. Within the data, there were certainly signs of continued underlying strength.

Still, it is hard to argue against the view that just like elsewhere, the momentum of inflation is turning. The core-core inflation rate on a 6mth annualised basis slowed to 2.9%, down from 3.3% in October and down from a peak of 4.9% just four months ago.

With the momentum turning lower, the BoJ will want to see evidence that inflation can stabilise at a level much higher than where inflation was before the pandemic.

The JPY is likely to take its direction from the PCE inflation data today with the potential for the Yen to sustain its strength through to year-end in the quieter than usual trading period.