The Japanese Yen is struggling to gain traction as the Bank of Japan (BOJ) reaffirmed its commitment to its dovish monetary policy. This position contrasts sharply with the hawkish stances adopted by other major central banks, which are actively raising interest rates to curb inflation.

The BOJ’s Governor, Haruhiko Kuroda, has repeatedly stated that the current monetary easing is necessary to support Japan’s fragile economic recovery. He has emphasized the need to achieve sustainable inflation driven by wage growth, rather than cost-push inflation caused by rising import prices.

The widening gap between Japanese interest rates and those in the United States and Europe is a key factor weighing on the Yen. Investors are increasingly attracted to higher-yielding assets in other countries, leading to capital outflows from Japan and a weaker Yen.

Analysts predict that the Yen will remain under pressure as long as the BOJ maintains its ultra-loose monetary policy. Some economists believe that the BOJ may eventually be forced to adjust its policy if inflation continues to rise, but this is not expected to happen in the near term.

Here are some factors influencing the Yen:

• BOJ monetary policy
• Interest rate differentials
• Global inflation trends
• Geopolitical risks

The Yen’s weakness is a double-edged sword for Japan. On the one hand, it can boost exports by making Japanese goods more competitive. On the other hand, it can increase the cost of imports, particularly energy and food, which are already putting pressure on household budgets.