Inflation rises in Japan. Economists at Commerzbank discuss BoJ's policy outlook and its implications for the Yen.
Prices in Japan are rising
“Prices in Japan are rising. As a result, some analysts expect another increase in the 10-year Japanese government bond yield target as early as this summer, effectively pushing up long-term interest rates in Japan. However, USD/JPY levels around 140 suggest that this is (still) a minority view.”
“As long as the BoJ continues to signal a wait-and-see approach to gain more certainty about the sustainability of inflation dynamics, high inflation will erode the Yen's purchasing power. As a result, we see limited upside potential for the Yen in the near term.”
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