BoJ Rate Hike Expectations Boost Japanese Yen

The Japanese Yen has strengthened against the US Dollar following fresh inflation data from Tokyo. The core consumer price index, which excludes fresh food, rose 2.3% year-on-year in January, matching forecasts and holding above the Bank of Japan's 2% target.

This marks the third consecutive month that inflation has remained at or above the central bank's goal, giving policymakers room to normalize monetary policy further. The data also showed that service prices increased 1.4% from a year earlier, indicating wage growth is feeding through to broader price pressures.

The Bank of Japan may raise its interest rate from 0.25% at its March or April meeting, with market pricing suggesting a hike is likely within the coming months. Traders are monitoring the upcoming US jobs report and the BoJ's policy meeting in March for further direction.