The Japanese yen remains in a weakened position against the US dollar. The current USDJPY exchange rate stands at 151.80.
Bank of Japan governor Kazuo Ueda finally clarified the Japanese regulator's future actions. The monetary policymaker noted that the BoJ will not directly react to the yen's exchange rate fluctuations. In this way, the Bank of Japan refuted market speculations that a steep decline in the JPY may force it to raise interest rates rapidly.
Ueda stated that the BoJ will not change its monetary policy in response to exchange rate fluctuations. BoJ officials are confident that, while a weak yen will push up import prices, this alone will not lead to an increase in borrowing costs.
However, if the risk of a surge in wages emerges and inflation exceeds the 2% target, the Bank of Japan may need to consider revising its monetary boundaries.
In March, the yen dropped to a 34-year low against the US dollar and remains under significant pressure.