The Japanese Yen (JPY) weakened on the same day as the BoJ rate hike. Economists at Standard Chartered note that the BoJ can take confidence in watching the Yen's movements.
The current weakness of the Yen is a double-edged sword
To achieve appreciation of the Yen against the Dollar it would be necessary to reduce the interest rate gap between the US and Japan, which depends in part on Fed policy.
The current weakness of the Yen is a double-edged sword. While it has significantly boosted Japanese export growth and equity market performance, its weakness is compounded by imported price pressures. In this sense, The weakness of the Yen may be a key factor for the Bank of Japan to tighten its monetary policy in the near future, as it seeks to stabilize import prices and safeguard consumer purchasing power..
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
