Bank of Japan Governor Haruhiko Kuroda said on Thursday that the Bank of Japan will carefully monitor how rising tensions in Ukraine could affect oil prices given Japan’s heavy reliance on energy imports.
Reuters has reported that Kuroda has also told parliament that it was desirable for exchange rates to move in a stable manner reflecting economic fundamentalsadding that the yen’s recent moves were “largely in line with this trend.”
Key comments
The BoJ does not have no plans to modify flexible policy soon.
The BoJ will monitor various ranges of data, including surveys on how people perceive price movements, to gauge inflation.
The BoJ will carefully monitor the impact of tensions in Ukraine on oil pricesgiven Japan’s heavy dependence on energy imports.
It is desirable that the exchange rate moves in a stable way reflecting the fundamentals and he thinks that the recent movements of the yen are in line with this desirable trend.
If the yen weakens further, that will lead to an increase in import prices.
The recent increase in import prices is mainly driven by the increase in the costs of raw materials based on dollars instead of through yen.
The exchange rate advances due to various factors, so it cannot be said that the divergence in monetary policy directions will definitely lead to a weak yen.
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
