The yen gained against the dollar early Monday, while the Bank of Japan’s latest outlook explains how a weaker currency can raise import costs for households and small and medium-sized firms.
At 2:48 a.m. ET (07:48 UTC), USD/JPY was quoted at 157.994, down 0.3% from the previous session’s close and leaving the dollar below 158 yen.
The BOJ’s October outlook says yen depreciation can lift profits at companies with substantial overseas activity. But costlier imports can reduce households’ real income and profits at small and medium-sized firms. The bank also says currency changes may affect prices more readily as businesses become more prepared to raise wages and prices.
On Oct. 30, the BOJ voted 8-1 to keep the uncollateralized overnight call rate around 1.25%. Its Summary of Opinions is scheduled for 6:50 p.m. ET (23:50 UTC) Monday, Nov. 9.
