According to Jinshi Data, Mizuho Securities strategist Shoki Omori expects the Bank of Japan to keep its policy stable next month. He said the market overreacted to Tokyo's CPI results and algorithmic trading began to take advantage of the opportunity to short the dollar against the yen.

Omori noted that looking at the details of the CPI data, there was not much change in demand-pull inflation items, which the central bank closely monitors for signs of whether price increases are sustainable.