Yen Weakens Amid Inflation Data, BOJ Holds Rates

The Japanese yen experienced a decline against major currencies following the release of consumer price inflation data for February, which showed a drop in overall inflation but an increase in core inflation. The yen fell to two-day lows against the U.S. dollar and other currencies, with market analysts suggesting that it may find support levels if the downtrend continues. The Bank of Japan maintained its key interest rate at around 0.5%, signaling a cautious approach amidst rising wage growth and inflation pressures. This depreciation of the yen is expected to enhance the competitiveness of Japanese exports, contributing to a rise in the Nikkei index as investors responded favorably. However, concerns about U.S. tariff policies continue to loom, impacting market sentiment and economic projections. Overall, the interplay between domestic inflation data and external trade dynamics is shaping investor outlook in Japan.