Yen Surges as BoJ Rate Hike Expectations Bolstered

The Japanese Yen has strengthened against the US Dollar as fresh inflation data from Tokyo reinforced market expectations that the Bank of Japan (BoJ) will continue raising interest rates.

Inflation data released by the Ministry of Internal Affairs showed Japan's core consumer price index, excluding fresh food, rose 2.3% year-on-year in January, matching forecasts and holding above the BoJ'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 service prices increased 1.4% from a year earlier, indicating wage growth is beginning to feed through to broader price pressures.