An interesting situation is developing around Japan's monetary policy. Last week, Japanese Prime Minister Takahiti met with Bank of Japan Governor Ueda, and notably — immediately after this, the yen began to weaken against the dollar and euro.

According to Mainichi Shimbun, the Japanese Prime Minister expressed concern about further interest rate hikes. It seemed like an ordinary meeting, but the market reacted quite sharply. This indicates that investors are closely monitoring any hints of possible disagreements between the government and the central bank.

Ueda, for his part, emphasized that the meeting was more of a general discussion about economic conditions, without any specific directives regarding monetary policy. But here’s the crux — the Japanese Prime Minister particularly stressed the need for coordination between the Bank of Japan and the government to achieve the 2% inflation target amid rising wages.

It turns out that the market is now waiting to see what happens next. Speculations about the possibility of the central bank raising interest rates in response to rising living costs and currency depreciation are still relevant. But how synchronized the actions of the Prime Minister and the Bank of Japan will be remains an open question. The situation clearly requires close observation.