BOJ meets amid worries of rising prices, weak yen

The US Federal Reserve is raising its benchmark interest rate by three-quarters of a percentage point.

Now the focus is on the Bank of Japan. It is expected to stick to its easy-money policy even in the face of rising inflation and in contrast to the stance of the Fed and other major central banks.

Japan's policymakers started their two-day meeting on Thursday.

BOJ Governor Kuroda Haruhiko has repeatedly indicated he will stay the course in a bid to boost Japan's pandemic-battered economy. The officials at the meeting are expected to affirm this policy course.

Also on the agenda is the impact of a rapidly weakening yen.

The Japanese currency recently slid to a 24-year low against the US dollar. The policymakers are expected to examine the effects on Japan's economy and commodity prices.

Governor Kuroda has said the yen at its current level heightens uncertainty and has a negative impact on the economy. He said the trend is making it difficult for companies to make business plans.

The cheaper yen also pushes energy and grain prices even higher, putting pressure on household finances. The higher costs take a toll on companies, although their overseas profits can rise when repatriated from countries with strong currencies.

Interest rates in the US are expected to see further hikes.

That means the yen could slip further against the dollar if the BOJ officials this week stay the course on policy.
There are concerns the widening gap in interest rates could end up hurting Japan's economy.

Prime Minister Kishida Fumio touched on the BOJ's policy direction at a news conference on Wednesday.

He said he expects the central bank will continue working sustainably and stably to maintain its inflation target.

Now the focus is on what Kuroda will announce right after the two-day meeting wraps up.