Japan’s Deputy Chief Cabinet Secretary Seiji Kihara defends the Bank of Japan’s (BOJ) ultra-loose monetary policy amid weakening yen and cost-push inflationary pressures, per Reuters.

Key quotes

“Prime Minister Fumio Kishida's administration meanwhile continues to defend the BOJ's ultra-easy policy as a necessary support to a still-fragile economic recovery.”

"It's hard to tighten monetary policy to deal with cost-push inflation, which means the monetary policy must remain loose."

Meanwhile, in the face of the ongoing depreciation in the yen, Reuters cited some analysts, as saying that pressure to tweak the yield cap could become overwhelming if the yen, now hovering near 122.00 to the dollar, plunges to around 130.00.

Market reaction

USD/JPY was last seen trading at 122.59, adding 0.09% so far.