Japan's inflation dynamics have become more sensitive to import costs and currency movements, raising concerns at the Bank of Japan that repeated external shocks could have a lasting impact on domestic prices and influence monetary policy, Reuters reported.
The concerns were outlined by BOJ Executive Director Koji Nakamura during a conference on monetary policy hosted by the central bank in May. Conference notes released on Monday showed that policymakers were increasingly focused on the possibility that supply-side shocks could become persistent and push up underlying inflation and inflation expectations, Reuters reported.
