Kazuo ueda, early on Wednesday, said that US definitions are likely to raise inflation in the United States in the short term, but may affect US prices in the long term by slowing US economic growth.
Main quotes
Depending on the volume of American introductory increases, it can have a significant impact on the commercial activity of each country.
US definitions are likely to be raised near inflation in the United States, but they may affect US prices in the long run by cooling American economic growth.
Another big question is how customs tariffs in the United States can affect the feelings of family and companies when measuring the effect of the tariff on the global economy.
We may have more information about the US tariff policy when finance leaders meet to attend the International Monetary Fund meetings/Group of Twenty later this month, so they will likely share views and discussions between policymakers.
Market reaction
At the time of the press, the USD/JPY pair increased by 0.19 % a day at 149.88.
Common questions between the Bank of Japan
Japan Bank is the Japanese Central Bank, which sets the monetary policy in the country. Its mandate is to issue banknotes, currency implementation and monetary control to ensure price stability, which means the purpose of inflation is about 2 %.
The Bank of Japan began a very monetary policy in 2013 to stimulate the economy and enlarge fuel in a low -inflation environment. The bank’s policy depends on quantitative and qualitative mitigation, or print notes to buy assets such as government bonds or companies to provide liquidity. In 2016, the bank doubled its strategy and increased the policy of alleviating it by providing negative interest rates first, and then directly controls the return of its government bonds for 10 years. In March 2024, BOJ raised interest rates, and effectively retreated from the high -drawing monetary policy position.
The massive incentive of the bank caused a decrease in its decrease against its main peers. This process was exacerbated in 2022 and 2023 due to the increased difference of policy between the Bank of Japan and other major central banks, which chose to increase interest rates sharply to fight high inflation levels. BOJ policy has expanded teams with other currencies, which pulled the yen value. This trend was partially reflected in 2024, when BOJ decided to give up the position of the superior policy.
The weakest yen and the increase in global energy prices increased Japanese inflation, which exceeded the BOJ goal by 2 %. The possibility of high salaries in the country – a major element in inflation in feeding – also contributed to this step.
