Japan PM candidate Hayashi: Weak yen fueling cost-push inflation

Japanese Prime Minister candidate Hayashi highlighted the weak yen's contribution to inflation pressures, citing currency depreciation combined with rising oil costs from the Ukraine conflict as drivers of cost-push inflation. Speaking as Chief Cabinet Secretary, Hayashi noted that Japan's historical preference for a weaker yen has diminished, acknowledging risks that Federal Reserve rate cuts could strengthen the yen and impact Japan's export-dependent economy. He confirmed the Bank of Japan's monetary policy alignment with government thinking while promising economic stimulus measures to address rising living costs if elected. The comments signal potential policy shifts that could support yen appreciation, as political leadership candidates increasingly recognize the negative effects of excessive currency weakness on domestic purchasing power. Markets are closely watching the leadership race for signals on future fiscal and monetary policy coordination.