YEN WEAKNESS AND HOUSEHOLD PRESSURES
The BOJ’s rate hike comes against the backdrop of weakness in the yen, which has made imported goods more expensive and added to pressure on Japanese households.
While the exchange rate has not traditionally been the central bank’s main policy driver, economists said the yen is becoming increasingly relevant to its decisions because of the impact on inflation.
Yamaguchi touched on how a weaker yen could influence monetary policy by changing the inflation outlook.
“The yen development is one of the key factors which could deviate policy from our baseline,” he said, adding that persistent currency weakness…
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