Weak Yen Continues Despite Tokyo Inflation Hitting 2%
Tokyo's core consumer inflation has reached 2% for the first time in years, meeting the Bank of Japan's target. However, this milestone has not led to a strengthening of the yen against the US dollar.
The January consumer price index (CPI) rose by 2.0% year-on-year, driven by higher energy costs and a broad increase in goods prices. The data is closely watched as a leading indicator for nationwide inflation trends.
Despite the BOJ's target being met, Governor Haruhiko Kuroda has emphasized that sustained wage growth is needed before considering policy normalization.
The yen remains under pressure due to the widening interest rate differential between Japan and other major economies. This means investors see little reason to hold yen when yields in the US and Europe offer higher returns.