BoJ governor Kuroda: Sharp yen fall, coupled with raw material price rise, driving up Japan's prices
''It's true recent sharp yen fall, coupled with raw material price rise, driving up Japan's prices,'' the Bank of Japan's governor, Kuroda said to parliament on Tuesday.
''Consumer inflation likely to accelerate toward year-end before sliding below 2% next fiscal year,'' he added.
He explained that there is very high uncertainty on how fx fluctuation and global commodity prices affect domestic prices and that the central bank will keep a close eye on fx as well as market moves and their impact on the economy.
Japan's Prime Minister, Fumio Kishida said that the BoJ looks comprehensively at various factors like economy and prices, not just fx, in guiding monetary policy
''FX moves on various factors when asked whether the US-Japan interest rate gap is behind the weak yen.
If BoJ policy affects fx moves, the government will work closely with the BoJ to take appropriate steps as mentioned earlier by the finance minister.
Speculative-driven rapid fx moves are problematic.
Won't comment on specific yen levels but govt ready to take appropriate action as needed.''
Meanwhile, USD/JPY has pierced the 149.00 level as per the following 5-month chart:
The bull eye the prospects of running up to the psychological level of 150 where speculating lies for further intervention from the Japanese authorities. At the start of the week, Japan’s top currency diplomat Masato Kanda said authorities would firmly respond to any excessive currency fluctuations.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
