Japan’s government to warn of weak yen

Japan’s government will warn
of the pain a weak yen may inflict on households in this year’s
long-term economic policy roadmap.

Reuters report citing a draft of the document it has sighted.

• “Japan’s economy continues to recover moderately, though
  some sectors, notably consumption, are stalling,” the draft of
  this year’s long-term roadmap said.
• “At present, the pace of wage rises hasn’t caught up with
  that of inflation,” it said.
• “Vigilance is required to the impact a weak yen could have
  on households’ purchasing power through rising import prices,”
  according to the draft, seen by Reuters by Tuesday.

The
reference to the weak yen’s impact will likely keep the Bank of Japan
(BOJ) under pressure to raise interest rates or slow its huge bond
buying.

‘Roadmap’ calls on the Bank of Japan

to
“sustainably and stably achieve its 2% inflation target while
confirming whether a positive wage-inflation cycle is in place”.

—

The
long-term roadmap, which is crafted each year as a key document
highlighting the administration’s policy priorities, is expected to
be finalised around June 21.

This article was written by Eamonn Sheridan at www.forexlive.com.