Although the headline rate rose again, it was less than expected. At the same time, the core rate fell slightly more than expected. All in all, this suggests that inflationary pressures are easing in Japan as well. However, this had little impact on the Yen.

Today's inflation figures suggest that the BoJ is unlikely to seek an exit from its ultra-expansionary monetary policy for the time being.

The exchange rate is likely to remain almost entirely dependent on the USD in the coming weeks. The BoJ is probably not unhappy with this. After all, it reflects the market's low expectations for its monetary policy. However, no one from the Japanese Ministry of Finance then needs to argue that a move in USD/JPY is fundamentally unjustified.