Japan’s core CPI declined to a two-year low during the month of August, further below the 2% target set by the BOJ. According to data released by the Statistics Bureau, nationwide core CPI grew by 0.5% YoY in August, slipping from the 0.6% growth seen in July.

Core CPI growth was the slowest seen since July 2017, when the reading had hit 0.5%. A weakening in global economic growth, strengthening of the Japanese yen over an increased safe haven appeal, and weak crude oil prices had driven the CPI lower in August. In addition, domestic demand remained anemic, further contributing to the slide in consumer inflation.

The Japanese yen remains largely unaffected on the release of this news, with USD/JPY trading at around 107.87 as the weakness in the US dollar drives the moves in this forex pair for now.