USD/JPY flows: Headline Inflation Below Target

The January National headline CPI dipped below two percent, with core CPI at 2% while core-core CPI remain above target at 2.6%. All three items are showing further moderation to begin 2026, partially due to base effect and latest round of energy stimulus. The BoJ will unlikely rethink their direction because of this data point but market participants will likely anticipate later rate hike on less inflationary pressure.

USD/JPY is trading 0.11% higher at 155.17.