Anyone will have a headache after hearing Federal Reserve (Fed) Chairman Jerome Powell's statement that he is determined to continue raising interest rates to deal with inflation.
The governor of the Bank of Japan (BOJ), Haruhiko Kuroda is certainly not an exception when forced to see the value of the yen currency will continue to weaken for a longer period.
The yen plunged to a five-week low on Monday after Powell insisted he would continue with tightening and keep interest rates high for longer to ensure inflation actually falls to the central bank's long-term target of 2%.
This will further widen the gap with the BOJ which still maintains a very loose monetary policy.
Although Kuroda has repeatedly said that their recovery is different from countries that have implemented tightening, but in reality, concerns about the weak value of the currency have failed to be dismissed by Japan.
Earlier also, some Japanese government officials expressed their concern over the sudden fall of the yen which was affected by the strengthening of the American dollar.
Powell's assertiveness is likely to support some analysts' predictions that the yen will break through the key psychological level of 140 against the USD, after it hit a price level of 139.39 last month.
This may further increase the concerns of businesses and households that are already affected by high inflation and the effects of tax increases.
With the economy still struggling to recover from Covid-19, the BOJ is seen to continue with loose policy and the country will have to endure the weakness of the yen.
