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MNI INTERVIEW: BOJ Eyes Yen Despite Small Impact So Far-Sekine

(MNI) Tokyo
(MNI) TOKYO

The weak yen could motivate the BOJ to act, despite its negligible impact to date, a former Bank chief economist told MNI.

The weak yen could hasten monetary tightening should it feed upside price risks, even if the underlying inflation trend remains below its 2% target, a former Bank of Japan chief economist told MNI, though he noted the impact of currency weakening on inflation so far had been minimal.

Toshitaka Sekine, professor at the School of International and Public Policy at Hitotsubashi University, said the BOJ is focused on the impact of forex on prices, particularly on potential second-round effects. If these accelerate, it could prompt it to consider reducing the degree of monetary accommodation, he added.

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The weak yen could hasten monetary tightening should it feed upside price risks, even if the underlying inflation trend remains below its 2% target, a former Bank of Japan chief economist told MNI, though he noted the impact of currency weakening on inflation so far had been minimal.

Toshitaka Sekine, professor at the School of International and Public Policy at Hitotsubashi University, said the BOJ is focused on the impact of forex on prices, particularly on potential second-round effects. If these accelerate, it could prompt it to consider reducing the degree of monetary accommodation, he added.

Keep reading...Show less