BOJ Holds Rates, Yen Under Pressure as Oil Recovers
The yen weakened past 158.5 per US dollar on Tuesday, paring the previous session's gains when oil prices recovered some of Monday's losses. This movement adds pressure on Japan, a net energy importer, as the oil rebound exacerbates risks to import costs and inflation.
entiment was also influenced by geopolitical developments. Iran denied any talks to end the conflict, contradicting US President Donald Trump's claims. On Monday, the yen briefly strengthened by about 0.5% after Trump postponed a planned attack on Iranian energy infrastructure for five days, citing "productive" talks.
Domestically, Japan's core inflation rose 1.6% in February—the smallest increase since March 2022—in line with government efforts to curb the cost of living. However, a surge in energy prices related to the Iran war could push inflation up again in the coming months. The softer inflation data was not enough to change policy expectations after the Bank of Japan held interest rates on hold last week.
Source: Newsmaker.id
