Key insights
- BOJ Governor Ueda stated the central bank is closely monitoring FX movements due to their significant impact on the Japanese economy and prices. The BOJ will consider how currency moves affect the likelihood of achieving growth and price forecasts when guiding policy. This hints at potential policy adjustments, including interest rate hikes, to combat yen weakness, which could have a minor ripple effect on global markets.
TOKYO, March 30 (Reuters) - Bank of Japan Governor Kazuo Ueda said on Monday the central bank will closely watch foreign exchange rate movement as it is among factors that have a huge impact on economic and price development.
"We will guide policy appropriately by scrutinising how currency moves could affect the likelihood of achieving our growth and price forecasts, as well as risks," Ueda told parliament, when asked by an opposition lawmaker whether the BOJ could raise its policy interest rate to combat yen weakening that pushes up import costs.