-- The yen could face renewed pressure if markets see the Bank of Japan as slow to address inflation risks, Reuters reported Satuday, citing Asian Development Bank President Masato Kanda.
Kanda pointed to the wide interest rate gap with the U.S. as a key driver, with investors focused on potential moves by the Federal Reserve. If the BOJ is seen as lagging, the yen may continue to underperform, the report said.
Kanda also warned that concerns over Japan's fiscal sustainability could prompt further selling of the currency, according to the report.
He said fuel subsidies should be temporary and targeted, urging governments to focus more on energy investment and diversification instead, the report said.
The yen remains near levels that have previously prompted intervention despite some recent dollar weakness, according to the report.
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