MNI MARKETS ANALYSIS: VAT Plans Raise Focus on Japanese Fiscal

Financing of the JPY5trn food consumption tax suspension raises questions on Japanese fiscal.

MNI Asia Pac Weekly Macro Wrap:

A weekly wrap of some of the key data outcomes/macro themes for the Asia Pac region

MNI US Employment Insight: Strong NFP Report Delays Rate Cuts

A stronger than expected payrolls report defied a raft of soft labor indicators and has seen analysts delay cut calls

MNI US CPI Preview: Clarity May Again Prove Elusive

Download Full Report Here: https://media.marketnews.com/USCPI_Prev_Feb2026_4401ef516e.pdf EXECUTIVE SUMMARY * Consensus looks for an acceleration in core CPI following recent soft prints, helped by typical startofyear price resets and the ongoing normalization from the shutdowndistorted Oct/Nov data. Core is seen rising to 0.36% M/M after December's 0.24% (based on unrounded estimates), with headline 0.29% after 0.31%. * Several technical factors mean any acceleration should be interpreted with caution. January is prone to residual seasonality effects and this report brings new relativeimportance CPI weights, both of which may subtly reshape monthly dynamics and make it difficult to make a clean read. * Indeed, shutdown-related distortions from late 2025 are likely to still complicate interpretation, with delayed data collection, atypical sampling windows, and the reversal of holiday discount effects. These could continue to reverberate in January readings, particularly across categories priced on a bimonthly rotation, which include most non-housing core CPI. * While the above factors are probably taken into account in analysts' estimates, on balance they still suggest that an upside surprise in particular is likely to be heavily caveated and downplayed, both by analysts and by policymakers, much in the same way as recent downside surprises have been faded. * Analysts expect firmer goods and services inflation in January, including for supercore, though with wide uncertainty. Used cars, certain core goods categories, and several service components are seen contributing to sequential strength, even as volatile travel categories may moderate. * Housing inflation is expected to remain on its gradual disinflationary path, with rent and OER readings likely close to December's pace but still influenced by the long lag in normalization. * With the next FOMC meeting still several weeks away, this report alone is unlikely to meaningfully shift expectations around nearterm rate cuts, especially with the latest labor market data appearing to eliminate any lingering impetus to stave off labor market risks. Policymakers will have both February CPI and an additional nonfarm payrolls release available before making decisions at the March meeting. * Nevertheless, this release remains a key test of whether tariff-related pressures, earlyyear price adjustments, and lingering categoryspecific normalization are beginning to exert more persistent influence-an issue several FOMC participants have highlighted as central to judging the underlying inflation trajectory.