Japan's core CPI higher than expected, yen weakens to 150

The Japanese yen has edged lower on Monday. In the North American session, USD/JPY is trading at 150.04, up 0.50% on the day.

Japan's core inflation dips to 3%

Japan's February inflation report pointed to weaker inflation. Headline CPI dropped to 3.7% from 4.0%, below the forecast of 4.2%. The decline was driven by the renewal of government energy subsidies. Monthly, CPI dropped by 0.1%, the first decline since September.

Japan's core inflation climbed 3% y/y in February, easing from 3.2% in January but above the market estimate of 2.9%. Although the core rate eased, it was higher than expected for a second consecutive month.

The inflation report comes on the heels of the Bank of Japan's decision to maintain its policy settings last week after hiking rates in January. At his post-decision press conference, BoJ Governor Kazua Ueda said wage and price data were "on track" but the US and global outlook had created uncertainty.

Today's inflation data is unlikely to change the central bank's rate path.
The BoJ has signaled its intent to further raise interest rates but isn't giving any hints as to when it will make a move, and many analysts are pointing to June or July.

On Tuesday, Japan will release BoJ Core CPI and the minutes of the BoJ's January meeting, at which it raised rates by a quarter-point to 0.5%.

Fed New York President John Williams said on Friday that the "current modestly restrictive stance of monetary policy is entirely appropriate", given the strong labor market and inflation still above the 2% target. Willams said the Fed would need to resume cutting rates to reach a neutral level but currently the downside risk to growth and the upside risk to inflation were both high. Williams acknowledged the uncertainties that lay ahead but said monetary policy was in the right place.

USD/JPY has pushed past resistance at 150.25. Above, there is resistance at 151.25

149.21 and 148.28 are providing support