Bank of Japan board member Toichiro Asada said the role of reflationist policies may have ended as the central bank’s approach to inflation evolves. He cautioned that rate hikes could push down underlying inflation while consumption lacks momentum, and urged care over the pace of further tightening. Asada said the current 1.25% policy rate is already within the bank’s estimated neutral range of 1% to 2.5%. The yen fell to 159.94 per dollar after his comments.
The dollar reached its strongest level in more than two months as a Bank of Japan board member urged caution on tightening, warning of its impact on growth and underlying inflation.
Read the full storyThe Bank of Japan board member said private consumption was nearly flat in the April-to-June quarter and that price increases do not necessarily reflect strong demand.