Even though the economic case for preventing the yen from sliding is much weaker, the Ministry of Finance seems to have responded with an even more forceful round of foreign exchange interventions this week than it did two years ago. Meanwhile, the Bank of Japan thinks that underlying inflation has yet to reach its 2% inflation target. But it also believes that the real stance of monetary policy is now very loose, which opens the door for multiple rate hikes even as headline inflation is set to slow sharply this year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services