Headline: BOJ’s Ueda Warns Yen Weakness Is Lifting Import Costs and CPI
Introduction: The Bank of Japan is sharpening its focus on currency dynamics as the weaker yen increasingly feeds through to domestic prices. Governor Kazuo Ueda signaled that exchange-rate pass-through to inflation has strengthened, putting import costs and the consumer price index under greater pressure.
Ueda noted that shifts in corporate behavior—particularly a growing readiness among Japanese firms to raise wages and adjust prices—have amplified the sensitivity of inflation to foreign-exchange movements. This evolving backdrop means yen depreciation now exerts a larger impact on import prices and, by extension, headline CPI, compared with previous cycles.
He added that the central bank will remain vigilant to the risk that sharp FX volatility could influence inflation expectations and underlying price momentum. With the yen facing renewed pressure, investors are reassessing the timing of the next BOJ policy move. The governor’s remarks reinforced the message that monetary policy will closely track how currency swings are affecting price stability, offering modest support to the Japanese yen as markets recalibrate rate-hike expectations.
Key Points: – BOJ Governor Ueda says a weaker yen is pushing up import prices and consumer inflation – Corporate pricing and wage behavior is heightening inflation’s sensitivity to FX moves – The central bank will scrutinize how currency volatility shapes inflation expectations – Yen pressure has revived speculation over the timing of the BOJ’s next rate hike – Messaging provided modest support to JPY as traders reassess policy trajectory
