Japan’s Kihara: Monetary policy must remain loose amid cost-push inflation

Dhwani Mehta FXStreet

Japan’s Deputy Chief Cabinet Secretary Seiji Kihara defends the Bank of Japan’s (BOJ) ultra-loose monetary policy amid weakening yen and cost-push inflationary pressures, per Reuters.

Key quotes

“Prime Minister Fumio Kishida's administration meanwhile continues to defend the BOJ's ultra-easy policy as a necessary support to a still-fragile economic recovery.”

"It's hard to tighten monetary policy to deal with cost-push inflation, which means the monetary policy must remain loose."

Meanwhile, in the face of the ongoing depreciation in the yen, Reuters cited some analysts, as saying that pressure to tweak the yield cap could become overwhelming if the yen, now hovering near 122.00 to the dollar, plunges to around 130.00.

Market reaction

USD/JPY was last seen trading at 122.59, adding 0.09% so far.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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