Author: Leika Kihara

The Japanese government warned that a weak yen is negatively impacting households’ sentiment and could decrease their purchasing power, according to a report released on Friday. The government expressed concerns about the economic consequences of the currency’s decline. Back in 2013, former Prime Minister Shinzo Abe’s Abenomics stimulus policies led to an increase in inflation expectations, which in turn boosted household sentiment. However, a recent resurgence in inflation expectations since mid-2023 has dampened households’ mood. This is partly attributed to media reports highlighting rising food prices and the effects of a weak yen on import costs. The government’s annual white…

Japan has adjusted its growth forecast for the year due to a decrease in consumption caused by the weak yen and rising import costs. Despite this setback, the country remains optimistic about a stronger economy next year, driven by increased capital expenditure and consumption. The government projects a sustained recovery led by domestic demand. However, some members of the economic council have expressed worries about the recent decline in consumption and the negative impact of the weak yen on households. This highlights the fragile nature of Japan’s economic recovery and the challenges it faces in maintaining growth in the face…

Japan experienced a significant jump in wholesale inflation in May, marking the fastest annual pace in nine months. This surge is believed to be a result of the weakening yen, which has increased the cost of importing raw materials. The data poses a dilemma for the Bank of Japan in terms of deciding when to raise interest rates. Analysts suggest that price increases driven by cost pressures could potentially stall consumption and hinder the achievement of the demand-driven inflation the bank aims for before further reducing stimulus. Takeshi Minami, the chief economist at Norinchukin Research, predicts that consumer inflation may…

Bank of Japan Takes Calm Approach to Rising Bond Yields STRESA, Italy – The Bank of Japan’s Gov. Kazuo Ueda stated that the central bank’s stance is for long-term interest rates to be determined by market forces. Ueda showed no major concerns over the recent increase in the benchmark 10-year government bond yield to a 12-year high. His remarks indicate that the Bank of Japan is unlikely to increase bond purchases in order to lower yields. Instead, the central bank will closely monitor market developments to decide when it should start tapering purchases. The Bank of Japan plans to maintain…