Bank of Japan Governor Kuroda, plenty of chat, the later part he touches on yen weakenss. Kuroda has said before he is not concerned with it, saying so again:

  • Japan is absolutely not in situation that warrants tightening monetary policy
  • Our biggest priority is to support japan’s economy by continuing with powerful monetary easing
  • Japan does not face trade-off between economic, price stability and so can continue to stimulate demand with monetary policy
  • Wages and prices must mutually rise in order for Japan’s inflation to stably hit 2%
  • </p> <p data-v-4573bc2e=""> BOJ will be unwavering in its stance of maintaining monetary easing to ensure recent rise in <span class="term__wrapper" data-v-6ba6fe73="" data-v-4573bc2e=""><span class="term__term-title-container" data-v-6ba6fe73=""><span class="term__term-title" data-v-6ba6fe73=""> inflation </span></span> <span class="term__pop-up-wrapper display-block" style="display:none;" data-v-6ba6fe73=""><span class="display-block" data-v-6ba6fe73=""><i class="close-icon term__close-icon" data-v-6ba6fe73=""/> <span class="text-body bold display-block" data-v-6ba6fe73=""><br /> Inflation<br /> </span> <span class="dots__wrapper term__description" data-v-c02f1b78="" data-v-6ba6fe73=""><span class="dots__visible" style="max-height:63px;" data-v-c02f1b78=""><br /> Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.<br /> </span> <span class="dots__actual-content" data-v-c02f1b78=""><br /> Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.<br /> </span> <!----></span> <span class="text-caption blue term__link" data-v-6ba6fe73="">Read this Term</span></span></span></span> expectations lead to sustained price rises</p> </li> <li data-v-4573bc2e=""> <p data-v-4573bc2e="">Recovery in Japan’s consumption, capex is weaker than in US, Euro-zone economies</p> </li> <li data-v-4573bc2e=""> <p data-v-4573bc2e="">Weak yen pushes up both export and import prices, so its impact on terms of trade is roughly neutral </p> </li> </ul> <p data-v-4573bc2e="">More:</p> <ul data-v-4573bc2e=""> <li data-v-4573bc2e=""> Amount of BOJ’s bond-buying has not increased much despite BOJ’s<br /> recent decision to offer unlimited buying of 10-year JGBs at 0.25%</li> <li data-v-4573bc2e="">Fed’s policy<br /> response will likely contribute to stable global growth, though must<br /> be mindful of risks such as possible stock market adjustment, capital<br /> outflows from emerging markets</li> </ul> <p data-v-4573bc2e=""> Yen is barely responsive:</p> <figure class="content-data__image" style="width:1075px;" data-v-4573bc2e=""> <p> <img loading="lazy" alt="usdyen kuroda 06 June 2022" class="media-center__image" width="1075" height="730" src="https://images.forexlive.com/images/usdyen%20kuroda%2006%20June%202022_id_0b7a8441-bdab-4525-8405-ef8552c3b1a3_original.jpg" style="object-fit:contain;" data-v-4573bc2e="" title="Bank of Japan Governor Kuroda says emphatically Japan will not tighten monetary policy 3"></p> </figure> <div data-ref="banner" class="banner__outer-wrapper article__automated-link-banner" data-v-4573bc2e=""><span class="banner__info hide-on-tablet hide-on-desktop-sm hide-on-left-and-right-banners-hidden hide-on-right-banner-hidden hide-on-desktop-md hide-on-desktop-lg hide-on-desktop-full-hd">ADVERTISEMENT – CONTINUE READING BELOW</span> </div> </article> <p 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