• Important for exchange rate to move stably reflecting fundamentals
  • Will closely watch impact of exchange rate movement on economy, prices
  • Does not think Japan is in stagflation nor will it slip into that

Some jawboning there by Kuroda as USD/JPY threatens a firmer break above 135.00 on the day. But the more pressing issue for the BOJ may be that 10-year JGB yields creeping just above 0.25% on the day, which is the upper bound of their implied cap.