Bank of Japan Gov. Haruhiko Kuroda faces one of the stiffest challenges of his career this week as he looks for a way to maintain stimulus without pushing the yen even further below its 24-year lows.
While the consensus view is that the central bank will stick with all its main policy settings, Kuroda risks accelerating a slide in Japan’s currency, ratcheting up the strain on his control of yields and exacerbating public angst over rising prices.
There’s another outsize problem too: a Federal Reserve rate increase that looks set to be even larger than the half-percentage point hike previously expected by economists. The Fed decision comes just hours before the BOJ’s two-day policy meeting starts on Thursday and its impact may still be roiling markets as Kuroda and his board mull their decision.