Japan’s PPI release could impact market expectations for a BoJ rate hike and JPY performance

    by VT Markets
    /
    Aug 12, 2025
    The Producer Price Index (PPI) data from the Bank of Japan shows prices of goods bought by Japanese businesses. This index often relates to the Consumer Price Index (CPI), though not always. If the PPI is high, it may lead to expectations for a rate increase from the Bank of Japan, which could boost the Japanese Yen. Data from New Zealand and Australia usually has less impact on the markets when released. The Reserve Bank of Australia is mainly focused on wage growth, which is currently higher than the CPI.

    Asian Economic Calendar Overview

    The Asian economic calendar for 13 August 2025 is based on the investingLive data calendar and uses GMT. It includes previous results and consensus estimates when available. This calendar helps track economic events that affect the market, offering essential data for analysis. We are closely monitoring tomorrow’s Producer Price Index (PPI) from Japan. A high figure may indicate growing consumer inflation, which could pressure the Bank of Japan (BoJ). This data point might change market expectations regarding a potential rate hike this year. Since the BoJ raised its policy rate only once in March 2024, the market is highly alert to signs of inflation. The latest July core CPI was at 2.8%, with the yen weak against the dollar, around 158. A strong PPI reading above expectations would be significant and could strengthen the JPY.

    Derivative Trading Strategy Insights

    For derivative traders, this means preparing for possible yen volatility. We are thinking about buying JPY call options or USD/JPY put options to take advantage of a sudden yen strength. With rising uncertainty, implied volatility is increasing, so timing is crucial to get good prices before the data comes out. In Australia, the focus remains on ongoing wage growth, a key issue for the Reserve Bank of Australia (RBA). Data from the June quarter showed the Wage Price Index grew by 4.1% annually, exceeding the latest CPI of 3.8%. This suggests another RBA rate hike is a possibility in the near future. Thus, strategies betting on a stronger Australian dollar could be wise. Traders may consider AUD/NZD call options, expecting the RBA to be more aggressive than New Zealand’s central bank. We also notice activity in interest rate swaps, with traders anticipating a higher chance of an RBA hike before year-end. Create your live VT Markets account and start trading now.

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