Bank of Japan Governor Kazuo Ueda fired a clear warning shot at financial markets over a possible policy move as he sharpened his words on the weak yen, a day after meeting with Prime Minister Fumio Kishida.
“Foreign exchange rates have a significant impact on the economy and inflation,” Ueda said in response to questions in parliament on Wednesday. “Depending on these movements, a monetary policy response may be necessary.”
Ueda also said it is important to take into account that the weak yen is more likely to have an impact on inflation than before, as Japanese companies become increasingly willing to pass on rising costs to customers through price hikes.
