Impact on Japanese inflation should yen appreciation versus USD? - Nomura

 Analysts at Nomura explained the likely impact on inflation in the event of unexpected yen appreciation versus USD.

Key Quotes:

"As the US moves to normalize monetary policy, our scenario for the Japanese economy assumes that the yen will continue to depreciate against the US dollar as a result of the widening gap between interest rates in the US and Japan.

Recently, however, we see signs of a possible slowdown in the pace of US monetary tightening, including weakness in US inflation.

A shift to yen appreciation would likely exert downward pressure on Japan's inflation rate."