The Japanese Yen increased on Tuesday as the latest inflation figures confirmed inflation was above the central bank’s target.

Japan’s core consumer inflation surpassed forecasts, keeping some projections alive that the Bank of Japan (BoJ)could bring an end to negative interest rates in April.

“The Yen rose after the release, but rather modestly considering its heavy short positioning and the magnitude of the sell-off since the start of the year,” stated ING forex strategist, Francesco Pesole.

“After all, the cautious BoJ is unlikely to send strong signals of an earlier move than April, and our economics team is doubtful policymakers will be able to hike before June at all.”

The Yen gained 0.35% to 150.18 at the time of writing, whereas in the middle of the month it reached 150.88, its highest level since 16th November, Reuters reports.

Elsewhere, the Dollar index, measuring the greenback against six peers, lost 0.05% at 103.71.

Markets have recently lowered expectations on the size and timing of rate cuts by the Federal Reserve this year, as the US economy remains robust and inflation pressures failed to dip significantly.

The PCE (personal consumption expenditures) deflator is due to be published on Thursday and is one of the principal highlights in the US calendar this week, and could signal less aggressive bets on easing by the Fed.

Furthermore, the Euro rose 0.1% against the Dollar at 1.0859 and has gradually increased since mid-February when it reached its lowest since mid-November at 1.0695.

According to analysts, the Euro became stronger as markets reduced their bets on future European Central Bank rate cuts to 90 basis points by the end of the year.

“We expect the single currency to rise to 1.10 against the greenback in the short term,” said Roberto Mialich, forex strategist at Unicredit.

“Should Fed chair Powell reiterate the higher for longer rate outlook at his testimony next week the Euro could drop a bit but not over 1.05,” he added.