The Bank of Japan is considering raising its policy interest rate from 1.0% to around 1.25%. The yen exchange rate has already reacted, showing a slight appreciation. Even so, at around 150 yen, it remains weaker than before. While raising the policy interest rate is part of the measures to combat inflation, the current yen exchange rate suggests its impact on prices will be weak. In short, inflation will likely continue for some time. Unless the value of the yen, which is declining globally, is comprehensively addressed, it will be impossible to overcome inflation. (Kei)

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