Deputy Governor Himino links yen depreciation to inflation risks, suggesting faster tightening if USD/JPY strength persists.
Bank of Japan Deputy Governor Himino stated that yen movements now have a larger impact on inflation than historically, due to shifts in corporate behavior. This remark follows Thursday’s USD/JPY spike to 161.80, tying currency fluctuations more directly to policy decisions.
The comments reinforce April’s hawkish minutes, indicating underlying inflation risks could prompt earlier rate hikes. Himino noted inflation is nearing 2% but may deviate upward, with price pressures no longer driven solely by temporary supply factors.
Japan’s economy remains solid, supported by corporate profits and household income, though oil prices pose a drag. The BoJ expects to continue raising rates, guided by economic and inflation risks.