Japanese yen continues to be hit on the foreign exchange market, but the central bank doesn’t care too much.

The dollar index keeps rising to new highs week after week; the dollar has never been so strong against the leading currencies. In addition to the global risk-off sentiment, the dollar’s appreciation is being driven by Fed rate hike expectations, including Jerome Powell’s stern speech that surprised the investors.

Meanwhile, the Japanese yen fell to a 24-year low since the Bank of Japan continues to maintain its loose monetary policy.

Haruhiko Kuroda the Governor of the Bank of Japan stated in Jackson Hole that the central bank is not going to raise the interest rate from the negative range. According to him, inflation is only temporarily rising above the target (it was 2.4% last time), but it is already going to be below the target next year.

Japanese central bank is one of the few that maintains massive monetary stimulus despite the rising inflation.

One of the reasons for maintaining loose monetary policy is that inflationary pressure in Japan is lagging behind inflation in the western countries, and on the other hand, Japanese monetary policy has been struggling to raise inflation for decades, so it is easier to overlook temporarily rising inflation.