The chief of the International Monetary Fund's Japan mission, Ranil Salgado, believes the yen's recent rapid slide could hamper the pandemic-stricken Japanese economy from returning to steady growth due to rising import costs and less consumer spending.
The yen's drop to a 20-year low against the dollar last week is a reflection of the Bank of Japan's decision to maintain loose monetary easing while the central banks of other major economies are tightening, Salgado said in a recent written interview.
Still, the IMF Japan mission chief said the Japanese central bank should stay the course until it attains its 2% inflation target as "inflation will fall back once higher prices (of imported commodities) diminish."