In order to cushion the economic blow from the Ukraine crisis, the Japanese government must compile a fresh stimulus package, Tatsuo Fukuda, an executive of Japan’s ruling Liberal Democratic Party (LDP), said at a news conference on Tuesday.

Key quotes

“Must take into account risk Japan’s economy may stagnate, slow due to rising inflation, shortage of labor, goods and supply.”

“There is chance Japan may suffer stagflation given rising inflation.”

“US, European central banks are embarking on rate hikes but BOJ cannot do so, which could affect forex moves.”

Market reaction

USD/JPY was last seen trading at 118.33, adding 0.14% on the day.