A stronger yen is bad news for Japan's inflation target

ArticleDeflationMarch 21, 2018 - 6:37:09 AM

Japan's inflation rate is still fairly sensitive to exchange rates.

Japan's central bank wants the country's inflation rate to hit 2 percent by fiscal year 2019, but it is less likely to happen if the yen continues to strengthen, said Credit Suisse's chief economist for Japan.

Hiro Shirakawa, speaking to CNBC at the bank's Asian Investment Conference in Hong Kong, said Japan's inflation rate is still "fairly sensitive" to currency exchange changes. So, he explained, an appreciating yen would lower the chances for the country's consumer price index to hit 2 percent in the "foreseeable future."

Currently, Japan is still far from its target with the core consumer inflation rate at 0.9 percent in January...


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