Bank of Japan Gov. Kazuo Ueda fired a clear warning shot to financial markets about a potential policy move as he beefed up his language on the weak yen a day after meeting with Prime Minister Fumio Kishida.
"Foreign exchange rates make a significant impact on the economy and inflation,” Ueda said in response to questions in parliament Wednesday. "Depending on those moves, a monetary policy response might be needed.”
Ueda also said it’s important to be mindful of the fact that the weak yen’s likelihood of having an impact on inflation is greater than before as Japanese companies become increasingly willing to pass on rising costs to customers via price hikes.
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