Bank of Japan Gov. Kazuo Ueda fired a clear warning shot to financial markets about a potential policy move as he beefed up his language on the weak yen a day after meeting with Prime Minister Fumio Kishida.
¡°Foreign exchange rates make a significant impact on the economy and inflation,¡± Ueda said in response to questions in parliament Wednesday. ¡°Depending on those moves, a monetary policy response might be needed.¡±
Ueda also said it¡¯s important to be mindful of the fact that the weak yen¡¯s likelihood of having an impact on inflation is greater than before as Japanese companies become increasingly willing to pass on rising costs to customers via price hikes.
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