In case you missed it, Eamonn had the report earlier which has helped to push the yen higher in trading today:
That just adds to the pressure from the bond market, with 10-year Japanese government bond yields keeping at the 0.50% limit since the end of last week. To keep things short, there is growing anxiety and anticipation that the BOJ could produce another surprise or may slowly begin to lean towards a policy shift some time this year.
The earlier report today puts some scrutiny on next week's policy meeting, in which we are likely to see the BOJ raise their inflation forecasts - especially after having seen Tokyo CPI come in at the highest since April 1982, staying above the central bank's 2% target for a seventh month running.
Looking at USD/JPY today:
We're seeing price slip towards the lower end of its recent consolidation since the drop last week. There have been fluctuations in and around its 100 (red line) and 200-hour (blue line) moving averages but in the bigger picture, the pair remains more confined between key support at 130.00 and daily resistance around 134.45-50 as well as the 135.00 mark.
Those will continue to define and limit risks for both buyers and sellers as we look towards the US CPI data later today and also the BOJ policy meeting decision next week.
In the case of the latter, there might be the possibility that markets get disappointed by a lack of action by the central bank after last month's policy tweak. But given how things are slowly lining up for the potential for such an event, I would not expect the yen to weaken all too much.