Japan’s Chief Cabinet Secretary Minoru Kihara stated on Thursday that the specific means of monetary policy are up to the Bank of Japan (BoJ) to decide, emphasizing the central bank's independence in policy-making [1]. Kihara refrained from commenting on BoJ Governor Ueda's specific remarks but expressed expectations that the BoJ will conduct appropriate monetary policies to sustainably and stably achieve its price target, while maintaining close cooperation with the government [1]. He also noted that the government and the BoJ have maintained close communication regarding economic and financial trends and will continue this collaboration [1].
Following Kihara's comments, the market reaction was muted, with USD/JPY trading flat near 159.90 as of the time of reporting [1]. This suggests that investors did not perceive the remarks as signaling any imminent changes in monetary policy or intervention.
The article also provides context on the factors influencing the Japanese Yen, including the BoJ's policy stance, the yield differential between Japanese and US bonds, and broader risk sentiment among traders. It notes that the BoJ's gradual unwinding of its ultra-loose monetary policy in 2024 has provided some support to the Yen, although no new policy actions were announced in Kihara's statement [1].
CONCLUSION
Chief Cabinet Secretary Kihara’s remarks reinforced the Bank of Japan’s autonomy in monetary policy decisions and signaled ongoing government-BoJ cooperation. The lack of specific policy guidance or new information resulted in a flat USD/JPY market response, indicating minimal immediate impact. Investors remain attentive to future BoJ actions for potential market-moving developments.