BOJ’s Ueda Says He Will Continue to Raise Rates, Finance Minister Denies Currency Manipulation
The US has blamed countries for currency manipulation to expand imports, yen weakening has taken part in trade negotiations.
Quick overview
- The US has accused countries, including Japan, of currency manipulation amid trade negotiations.
- Japan's core inflation rose to 2.9%, prompting BOJ Governor Ueda to signal potential interest rate hikes.
- The NIKKEI225 experienced its best week in three months, gaining 3.41% as trade tariff fears eased.
- Finance Minister Kato denied Japan's involvement in weakening the yen and is set to discuss currency issues with US officials.
Live NIKKEI225 Chart
The US has blamed countries for currency manipulation to expand imports, yen weakening has taken part in trade negotiations.
- Japan core inflation came in higher than expected at 2.9%
- BOJ’s Ueda tells Parliament he will raise rates to reach 2% inflation target
- Finance Minister Kato says currency manipulation will be discussed with USA
The NIKKEI225 had its best week in 3 months as trade tariff fears subsided in hopes negotiations can come to a positive conclusion. Today’s rally of 1% makes a total weekly gain of 3.41%.
BOJ Set to Hold Rates Steady
The governor of the BOJ told parliament today that the central bank would pursue policy to reach its 2% inflation target.
The market has widely discounted the next policy meeting on April 30 – May 1 will keep interest rates on hold at 0.5%.
Today’s inflation data was mixed, with overall Inflation YoY slowing pace to 3.6% in March from 3.7% the previous month.
However, Core Inflation YoY increased from 2.7% previously to 2.9% in March. This inflation metric is more similar to the Core CPI which the BOJ follows closely in its decision making.
The next data for Core CPI is out on April 22, just a week before the policy meeting and might bring some surprises.
Currency Manipulation
The finance minister also spoke to parliament today and said that the government was not involved in weakening the yen.
Katsunobu Kato’s comments came after accusations from the US government that Japan intentionally depreciates it currency.
“Japan does not manipulate the currency market to intentionally weaken the yen, as seen by the fact our latest action was to conduct yen-buying intervention.” Kato stated to parliament.
Kato is scheduled to visit Washington next week for the G20 finance ministers and the IMF meetings.
Analysts expect Kato to meet with his US counterpart Treasury Secretary Bessent for bilateral talks on the sideline of the scheduled meetings.
Bessent has also said he is looking forward to talks with Kato on trade tariffs and non-tariff barriers, in a hint of currency manipulation.
Kato said he was aware that the US wanted to discuss exchange rate concerns, without adding anything as to what they might debate.
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