The yen fell to a seven-year low on March 28, ten days after the Bank of Japan's governor predicted that no big decline was likely. (Source photos by Kosuke Imamura and Jiji)

Yen slide breeds uncertainty over BOJ yield cap policy

Costs of ultraloose monetary policy are being counted by Japanese consumers

MITSURU OBE, Nikkei Asia chief business news correspondent

April 4, 2022 06:02 JST

TOKYO -- When Haruhiko Kuroda predicted on March 18 that a big decline in the yen was unlikely, the Japanese currency was at 119 to the U.S. dollar. On March 28, it fell below 125 for the first time in seven years.

The weakness was not just an indictment of the Bank of Japan governor's forecasting abilities. It has significantly complicated monetary policymaking, and has some predicting that a pillar of BOJ policy may need to be adjusted.