Tokyo\u2019s CPI excluding fresh food rose 1.8% year on year in February. This was above the forecast of 1.7%.<\/p>\n
The reading indicates a 0.1 percentage point difference versus expectations. The data refer to Japan\u2019s Tokyo core inflation measure for February.<\/p>\n
This morning’s Tokyo CPI reading is a critical signal for us. Coming in at 1.8%, it has surpassed expectations and brings the Bank of Japan’s 2% inflation target clearly into view. This increases the probability of a policy rate hike at the next BoJ meeting in March.<\/p>\n
In the currency market, we should anticipate a stronger yen as rate hike speculation builds. This suggests positioning for a lower USD\/JPY exchange rate by purchasing puts or establishing bearish option spreads. This data is the most significant since the BoJ’s slow normalization process began back in 2025.<\/p>\n
For interest rates, this inflation print will apply upward pressure on Japanese Government Bond (JGB) yields. We see an opportunity in shorting JGB futures, as the market will price in a more aggressive policy stance from the central bank. As of January 2026, the national core CPI was hovering around 1.6%, making this Tokyo number an unwelcome acceleration for the BoJ.<\/p>\n
On the equity side, a stronger yen typically acts as a headwind for Japan’s export-heavy Nikkei 225 index. We believe it is now wise to hedge long equity portfolios by buying Nikkei puts. This is a prudent defensive move, especially considering the strong market performance we saw throughout last year.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Tokyo\u2019s core CPI excluding fresh food rose 1.8% in February, beating forecasts slightly at 1.7%.<\/p>\n","protected":false},"author":62,"featured_media":17038,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43704","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/43704","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=43704"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/43704\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17038"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=43704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=43704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=43704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}