Powell’s Hawkish Stance Causes Headaches for Kuroda as Yen Falls
- Yen has weakened to a five-week low following Powell’s remarks
- Markets expect wider yield differential to last for longer
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Federal Reserve Chair Jerome Powell’s stern message at Jackson Hole has made it clear for Bank of Japan Governor Haruhiko Kuroda that the weaker yen, a major source of concern for Japan’s economy, won’t be going away anytime soon.
The yen fell to a five-week low Monday morning, after Powell warned against prematurely loosening policy in his speech at the Federal Reserve Bank of Kansas City’s Jackson Hole, Wyoming, retreat Friday. With other key central bankers, Powell emphasized his strong resolve to fight inflation, while Kuroda made it clear he’s sticking with monetary easing.