Japanese Domestic Consumer Goods Price Index (SEP) (23:50 GMT; 19:50 EST)
                          (MoM)              (YoY)
Consensus:          0.1%               3.3%
Previous:              0.2%               3.4%

Outlook:  Japanââ,¬â"¢s equivalent of the producer price index is expected to cool slightly in September as initially cheaper commodity prices start to relieve some of the pressures produced by an unfavorable exchange rate.  Crude oil has been a necessary burden for Japanese businesses for more than a year now.  The nation imports an imposing 98 percent of the oil that it uses, leaving producers vulnerable to the very public rally to record-highs in the previous months.  However, since reaching an all-time high for the average price per barrel for the month of August, crude, and many other commodity, costs have eased dramatically.  This will be a welcomed development for the business sector that has struggled with a dramatically cheaper yen that has in turn made imported goods more expensive.  Furthermore, cheaper prices for producers will offer some reprieve from most companiesââ,¬â"¢ inability to pass higher prices onto unreceptive consumers.  While this may provide some support for a weaker CPI figure in the months ahead should the trend continue, Japanese firms have absorbed the price pinch for sometime and the opportunity to pass it along will likely be too good to pass up.

Previous: Augustââ,¬â"¢s DCGPI repeated its 25-year high on an annual basis even as the monthly figure slowed from its own relative, record pace.  Inflation at the producer level advanced 3.4 percent from the same month a year ago with consistently higher energy prices leading a commoditiesââ,¬â"¢ run that continues to lay the pressure on profit margins.  While crude oil prices had retreated from the intra-day record high $78.40 per barrel seen in New York trade, the pullback was still centered on the $65 - $70 mark.  Furthermore, other necessary goods have produced their own problem during the market-wide, nearly year-long rally.  From industrial metals, the copper prices have nearly doubled in a year.  Supporting this indicator, the Bank of Japanââ,¬â"¢s own index of 16 overseas commodities markets has reported 20.4 percent inflation year-over-year through the same month.  While other industrialized nations have been able to somewhat weather such problems, the Japanese business sector has had a even more difficult time as consumers continue to sit on greater earnings as confidence levels remain doubtful.

Bank of Japan Rate Hike (n/a GMT; n/a EST)
Consensus:            0.25%
Previous:                0.25%

Outlook:  Officials at the Bank of Japan are expected to leave Japanââ,¬â"¢s overnight cash rate untouched at the end of their two day meeting.  More than in previous months, speculation surrounding this monthââ,¬â"¢s untouched lending rate comes amid data that has broken former trends.   First of all, the dependency on consumer spending for contributions to inflation and growth that necessitate a rate hike are questionable.  The trend in previous months has seen consumer confidence rise bump steadily higher while spending turns lower.  This was not the case in the most recent data.  Optimism sank in the month of September even as unemployment ticked lower to 4.3 percent and both household spending and retail sales indicators picked up.  Despite this dip in spending however, the Eco Watchers outlook survey for September has climbed higher above the contractionary/expansionary-50 level.  Aside from growth predictions though, inflation numbers likely provide the most influential argument for the central bank to hold off on further removal of accommodation in the near term.  Augustââ,¬â"¢s nationwide consumer inflation numbers revealed another stutter in price pressures.  For the month, prices deflated 0.1 percent while on an annual basis the rate comes in at a 0.3 percent drop.  Even the more recent, and often times more hawkish Tokyo CPI was providing a dim prelude for national inflation.  For September, the gauge went unchanged on the month and slipped 0.6 percent from the same time a year ago, both missing expectations of slight improvements.  Before the central bank took on its first rate hike, they had explicitly said sustainable inflation would be on of the three key ingredients for such a shift.  With pressures already abating, and consumer spending having yet to prove a substantial force behind rising prices, the Bank of Japan will likely take its time in considering another rate hike in its already admittedly ââ,¬Ëœgradualââ,¬â"¢ regime.

US Import Price Index (SEP) (12:30 GMT; 08:30 EST)
                              (MoM)            (YoY)
Consensus:          -1.3%               3.8%
Previous:              0.8%                6.6%

Outlook:  US Import prices likely fell for the first time since March, as significantly lower commodity prices limited the total imports bill. Indeed, with pronounced declines in the price of oil, domestic gasoline and other energy prices abated through the end of August and through September. This reflected the effects of lower input price costs and represented a significant cost savings to the US consumer. Given that gas prices have since only fallen further, many have claimed that a boost in disposable income from lower gas prices will serve to buoy personal expenditures through the final quarter of the year. Regardless, Fed watchers may notice that quickly falling import price inflation will likely limit the headline CPI figure and subsequently cause the central bank to cut interest rates in the medium term. Of course, it is no exaggeration to claim that we are likely at least several months off from such an occurrence. It serves to mention, however, that tomorrow will be the first of several inflation reports that may change outlook on the official US overnight lending rate.

Previous: Import prices rose at a 3.8 percent annualized pace through August, as record-high oil prices drove up the nationââ,¬â"¢s already-massive energy bill. This likewise left headline CPI growth at an identical 3.8 percent year on year rate, and reduced speculation that the Federal Open Market Committee would feel the need to cut interest rates in the medium term. Regardless, expectations of significantly lower headline inflation through September may provide the catalyst for renewed dollar weakness on the prospect of lower interest rates. We will wait for tomorrowââ,¬â"¢s import price report to shed more light on the subject and to guide forecasts of the headline CPI number.

US Advanced Real Retail Sales (SEP) (12:30 GMT; 08:30 EST)
                           (Advanced)            (ex Autos)
Consensus:              0.2%                    0.0%
Previous:                 0.2%                    0.2%

Outlook:  Advanced Retail Sales are expected to rise by 0.2 percent matching the gains from the month prior. Rapid declines in the price of gasoline have boosted consumer confidence and discretionary spending.  Department Store chains have reported their best monthly gains since 1998, however, questions remain as to whether consumers continued to spend money on higher end items such as household durables, electronics and cars. The Advanced Retail Sales report could have profound implications on FX trading tomorrow as it may either confirm or refute the latest speculation that the Federal Reserve will maintain rates at 5.25% for the foreseeable future.

Previous: Retail sales in the US unexpectedly rose in August, a sign the economy is withstanding the slump in the housing market. Sales rose 0.2 percent after a 1.4 percent July increase that was the biggest jump in six months, the Commerce Department said in Washington. Sales excluding automobiles rose 0.2 percent after a 0.6 percent gain. Sales of motor vehicles and parts, which make up about a fifth of total retail sales, rose 0.4 percent last month after a 4.3 percent gain in July. The Commerce Department figures don't always correspond to industry reports, however, as General Motors Corp. and Ford Motor Co., the two largest U.S. automakers, have announced plans to cut production in coming months after sales sagged.

University of Michigan Consumer Confidence (OCT P) (13:45 GMT; 09:45 EST)
Consensus:           86.5
Previous:              85.4

Outlook:  US consumers are expected to be more optimistic in their outlooks for October, according to economistsââ,¬â"¢ predictions, with higher wages and falling gasoline price paving the way.  Risk towards a surprise contraction rests on the increasingly gloomy outlooks for the housing market, which is still a very real weight on Americanââ,¬â"¢s available and potential wealth. Additionally, later revisions may tack in the tensions that have been rising with North Korea. However, the aforementioned bright spots could be the right combination to lift consumersââ,¬â"¢ spirits. All in all, a renewed confidence could put the desire to spend back in American minds which would further facilitate the Fedââ,¬â"¢s predictions of a soft landing in the US growth slowdown and a cooling of inflation.

Previous: The University of Michigan survey of sentiment improved during the month of September to a reading of 85.4 from 82.0 as a 16 percent drop in the price of a gallon of gasoline made consumers more optimistic about the economic outlook. The decline in gas prices and lower inflation expectations also left Americans feeling better about financial conditions, which could help prop up the spending that makes up two-thirds of the economy and help to cushion the impact of a slowing housing market.

Richard Lee is a Currency Strategist at FXCM.