Besides problems in the world’s largest sovereign bond market owing to the Bank of Japan’s extensive monetary easing program, inflation continues to prove problematic with Japan struggling to avert disinflation. Core CPI released overnight declined from 2.20% to 2.00%, missing expectations and highlighting the headwinds facing the Central bank as they seek to maintain inflation. Not helping the situation is weaker energy prices which could fall further if the nation moves forward with bringing two nuclear power plants back online. This would dramatically reduce imported energy needs at a time when the energy markets are largely oversupplied. The one bright spot was the month over month growth in household spending, and although negative on an annualized basis, the trend looks to be reversing. USDJPY trended higher overnight in spite of the disappointments aided in part by dollar strength.