🇯🇵Cable FX Macro Weekly Note: Japan National March CPI

**As seen in Risk In The Week report 04/14/23, subscribe at cablefxm.co.uk/reports

Japanese CPI seems to have peaked in January as the following month eased to 3.3% from 4.3% Y/y, the figure came in line with estimates. Despite the slowdown in the headline, the metric excluding food and energy accelerated at a faster pace for a 10th consecutive month to 3.5% Y/y, this was above the consensus median of 3.4% and the prior 3.2%. While core prices rise to the highest since the early 1980s, the peak might not be seen yet as the March Tokyo core CPI indicator extended its advance to 3.2% Y/y, above economists expectations. The development increases the chances of the BoJ adjusting policy soon, this could be reflected by widening the range of its JGB YCC, abandoning negative rates seems less likely given the rhetoric by the central bank. The outlook for a policy change dimmed after governor Ueda stated that a continuation of YCC policy was appropriate given the current dynamics in the economy and financial conditions. On this, analysts at MUFG said that expectations for an immediate shift on April 28 have dampened, they added that the bar for further adjustment has been raised. MUFG now expects the BoJ to adjust its yield curve policy by June, they note that the paring back of expectations will make it harder for the yen to extend gains into the April meeting.