Japan Interest Rate

Some members of the Bank of Japan's board viewed that monetary policy responses would be needed if there was a change in the outlook of economic activity and prices due to yen movement, minutes from the April meeting showed. "... if movements in foreign exchange rates had an impact on firms' medium- to long-term inflation expectations and corporate behavior, this would raise the risk of prices being affected, making policy responses necessary," it said. One member believed that accommodative financial conditions should be maintained. However, the member pointed out that, if underlying inflation continued to deviate upward against the backdrop of a weaker yen, it was quite possible that the pace of policy normalization would increase. The minutes came after Governor Kazuo Ueda recently told parliament that the central bank could raise interest rates in July, depending on economic and price data available at the time.