Analyst comments after lower than expect CPI in Japan impacts JPY

JPY was impacted by lower than expected CPI in Japan, noted analysts at ING.

"Overnight developments have been driving the yen higher, although domestic developments may have contributed to JPY lagging the Swiss franc in this risk-off environment," said Francesco Pesole FX Strategist at ING.

"Japan’s national inflation figures came in below expectations this morning, with headline CPI slowing from 2.8% to 2.7%, and core CPI from 2.8% to 2.6%. Core inflation excluding fresh food and energy actually moved below 3.0% for the first time since 2022."

"Our Japan economist discusses what the implication of the release could be for the Bank of Japan’s tightening prospects in this note. While a pause at the April meeting is largely expected, we still think risks are skewed to an earlier hike compared to what the market is currently pricing. Market expectations are currently for a move in October, while our economist is calling for a 15bp hike in July followed by a 25bp hike in October."

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