The Bank of Japan is believed to have analyzed the current state of the economy and the impact of the depreciation of the yen, which has reached the level for the first time in 24 years, on the economy and prices at a meeting to decide monetary policy on the 16th.
The Bank of Japan held a monetary policy-making meeting on the afternoon of the 16th, attended by nine policymakers including President Kuroda.
First, the executive department of the Bank of Japan reported on the current state of the economy and recent trends in financial markets, and then the depreciation of the yen, which has reached the level for the first time in 24 years, has an impact on the economy and prices, and upward pressure has increased. It seems that they analyzed trends in long-term interest rates, the status of government bond purchases to curb interest rates, and the impact of Russia's invasion of Ukraine.
Governor Kuroda has repeatedly stated that he will continue to carry out large-scale monetary easing to support the economy, and this policy is expected to be confirmed at the meeting on the 17th.
However, while the Fed, the central bank of the United States, is accelerating monetary tightening by deciding to raise interest rates by 0.75%, if the Bank of Japan continues monetary easing, the interest rate differential between Japan and the United States will widen. With the yen depreciating further in the background, there are concerns that the negative impact on the economy will increase.
Given this situation, it will be interesting to see how President Kuroda will explain the impact of the weak yen and the future of monetary policy at a press conference on the 17th.