The Bank of Japan faces mounting pressure to tighten its monetary policy due to the weakening yen, despite expectations of no immediate interest rate hike following the conclusion of a two-day meeting on Friday. With the yen at three-decade lows, there is speculation that Japan's government may intervene in forex markets to bolster the currency, a move not seen since 2022. The yen's decline, with one dollar buying 155.58 yen early Friday, a level not witnessed since 1990, has raised concerns about the impact on imported goods' prices in Japan. Analysts anticipate the possibility of the BoJ revising its inflation forecasts post-meeting due to the yen's depreciation. While the central bank recently abandoned its negative interest rate policy, signaling its first rate increase in 17 years, officials have indicated no immediate further hikes, contributing to the yen's downward trend. The potential implications of the weak yen on the BoJ's easing program and the remarks of Governor Kazuo Ueda are expected to be closely scrutinized for insights into future policy moves.
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