Overview
- Governor Kazuo Ueda said the Bank of Japan will closely watch foreign‑exchange moves and treat them as a direct input to policy decisions.
- Traders pushed the yen higher after the remarks, with dollar‑yen slipping as markets read the comments as greater sensitivity to currency swings.
- Ueda said exchange‑rate shifts now feed into prices more than before because companies are raising pay and passing higher costs to shoppers.
- The central bank will judge how currency moves change the odds of hitting its 2% inflation goal and will fold those effects into its forecasts and risk assessments.
- Ueda added that long‑term yields look aligned with expectations and that a gradual pace of short‑term rate hikes should keep the bond market stable, as the yen’s earlier slide toward 160 per dollar drew fresh warnings of possible intervention from Tokyo’s currency chief.