Japan’s core CPI, excluding special factors, climbs 2.8% in April vs. 2.5% rise in March

Lallalit Srijandorn FXStreet

The Bank of Japan (BoJ) said on Tuesday that Japan's core consumer inflation rate excluding one-off factors, as measured by the Japanese central bank's new gauge, reached 2.8% in April. This figure exceeded the BoJ’s 2% target and accelerated from 2.5% in March. Meanwhile, core-core CPI excluding special factors up 2.2% in April, versus a 2.6% rise in March.

The new index, which strips out institutional factors such as education and energy-related subsidies, revealed a much faster year-on-year rise than the 1.4% rate in the benchmark core Consumer Price Index (CPI) figure the government published.

Market reaction

At the time of press, the USD/JPY pair is up 0.05% on the day at 159.01.

Bank of Japan FAQs

What is the Bank of Japan?

The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.

What has been the Bank of Japan’s policy?

The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.

How do Bank of Japan’s decisions influence the Japanese Yen?

The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.

Why did the Bank of Japan decide to start unwinding its ultra-loose policy?

A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

GBP/USD keeps the vacillating tone near 1.3650

GBP/USD struggles to extend its ongoimg recovery on Monday, this time flirting with the 1.3650 zone. Indeed, Cable trades without clear direction, although it manages well to maintain its business in the upper end of the recent range, challenging multi-week tops despite the decent recovery in the Greenback.

EUR/USD drifts lower to the 1.1670 zone

EUR/USD navigates a tight range at the beginning of the week, hovering around the 1.1670 region amid humble losses. The pair’s decline follows a decent advance in the US Dollar while investors continue to closely follow developments from the US money market.

Gold pushes harder; focus is now on $4,700

Gold keeps its bullish pace well and sound and approaches the $4,700 mark per troy ounce for the first time since early May. The precious metal’s move higher comes despite slight gains in the US Dollar and a modest pullback in US Treasury yields across the curve.

Here's what I learned trading meme coins

I’ve been trading cryptocurrencies for the past seven years, with meme coins becoming one of the most exciting and implacable parts of my experience. I love them because they represent internet culture and community sentiment, and, let’s be honest, extreme speculation. Newly launched meme coins were especially tempting: get in early enough, I thought, and a small bet could turn into a huge return.

Bessent’s presser in focus

Preview: Busy week ahead, with Bessent kicking this off today, with things wrapping up with Warsh at Jackson Hole. For a month that should have been a temporary period of ‘quiet’, we had anything but last week, with the bond market and tariffs front and centre.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.