Japan's economy rides on tailwind of Fed rate hike prospect

DURING the recent Bank of Japan (BOJ) monetary policy meeting, the BOJ stood pat on its monetary policy but the prospect of a Federal Reserve rate hike is expected to keep the yen weak against the dollar.

Japan benefits from a weak yen as it bolsters the country's export price competitiveness. The United States is Japan's largest trading partner and the dollar-yen influences the level of exports and imports between the two countries.

The Bank of Japan had previously launched an unprecedented monetary easing, spurring the dollar-yen to multi-year highs in a bid to revive Japan's economy.