TOKYO: While surging global bond yields are hampering the Bank of Japan’s (BoJ) efforts to cap long-term interest rates, a broad US dollar rally is helping the central bank’s new framework achieve what matters most: a weakening yen.
Yen falls help the central bank as it gives Japan’s export-reliant economy a much-needed boost that can spur business investment. It does also make imports costlier, but that could help push inflation towards an ambitious 2% target – a combination the BoJ would welcome as long as households can manage the rising cost of living.
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