Fragile yen could make BOJ's Ueda tilt more towards hawkish stance
TOKYO -The yen's slide to fresh 34-year lows is likely to force Bank of Japan Governor Kazuo Ueda to walk a delicate line in guiding monetary policy this week as he tries to maintain a calibrated path to exiting ultra-easy rates without upending the currency.
The BOJ is expected to keep interest rates steady at a two-day meeting ending on Friday, and project inflation to stay near its 2% target in coming years on prospects of steady wage gains. "There is no change to our stance. We'll watch market moves carefully and respond appropriately," Finance Minister Shunichi Suzuki told parliament on Thursday, when urged by an opposition lawmaker to intervene in the currency market.
"The BOJ won't hike rates just for the sake of preventing yen declines," said former BOJ official Nobuyasu Atago. Japan's ruling party is not yet in active discussion on what yen levels would be deemed worth intervening in the market, though the currency's slide towards 160 to the dollar could prod policymakers to act, party executive, Takao Ochi, told Reuters.
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