MNI BRIEF: BOJ Ueda Warns Of Weak Yen Impact On CPI

Bank of Japan Governor Kazuo Ueda on Friday warned that the weak yen could raise import costs and domestic prices, ultimately putting upward pressure on consumer prices.

Speaking to lawmakers at an upper house panel, Ueda said the BOJ needs to monitor how the weak yen affects corporate wage- and price-setting behaviour, which are influenced by inflation expectations. 

He added that the bank is closely watching how currency movements could impact expected inflation and the underlying CPI, which is a key focus of the BOJ. (See MNI POLICY: BOJ Prefers To Wait In Dec, Barring Yen Weakness)

Finance Minister Satsuki Katayama, speaking at the same panel, noted that Japanese government bond yields are determined by market forces and reflect a variety of factors, including economic and price developments, the outlook for monetary policy, supply-demand conditions, and movements in overseas markets.