Walter, thank you. You made me look at the Character palette again. The stroke colour was set to black but the stroke width set to zero which is why I dismissed it as the problem. However it seems that setting the stroke colour to ‘No Stroke Colour’ fixes the problem. Why a zero stroke width shows up is weird but problem solved.
[Walter Soyka] “Are you sure the text doesn’t have a very thin stroke applied in the Character panel?”