USD/JPY Steady as Japan Core CPI Holds at 1.8%, Below BOJ 2% Target

USD/JPY remains in focus as Japan's core consumer price index rose 1.8% year-over-year in March, matching market forecasts and holding steady from the prior month's reading. The figure marks the second consecutive month below the Bank of Japan's 2% inflation target, a development that complicates the central bank's path toward further monetary policy normalization. While headline inflation remains contained, analysts are flagging rising energy costs as a potential catalyst for renewed inflationary pressure in coming months, which could shift BOJ rate hike expectations. The subdued CPI print suggests the BOJ may maintain its cautious approach at upcoming policy meetings, potentially limiting near-term yen appreciation. For USD/JPY traders, the data reinforces a modestly supportive backdrop for the pair, as a patient BOJ stance contrasts with still-elevated US interest rates. Key levels to watch include resistance near recent highs and support around the 150.00 psychological handle. Any signs of an energy-driven inflation rebound could quickly alter the outlook, potentially strengthening the case for BOJ tightening and boosting yen demand. Traders should monitor upcoming energy subsidy policy decisions and global oil price trends for further directional cues.