Bank of Japan Governor Haruhiko Kuroda said on Monday that easy policy aimed at supporting the economy didn't contradict last week's yen intervention as the policies have different objectives.
“I don’t think that the BOJ's easy policy isn’t consistent with forex intervention,” Kuroda told reporters.
“The forex interventions to address rapid and one-sided moves are appropriate and the BOJ continues to be in close contact with the government on forex moves.”
Kuroda also said that the purpose and effects of monetary policy and forex interventions are different, so easy monetary policy didn't contradict the forex intervention.
However, when asked about the effects of the yen-buying intervention and when to conduct forex intervention in the future, Kuroda didn't elaborate as the BOJ doesn't have responsibility for forex intervention. The Ministry of Finance has oversight of forex interventions.
Kuroda repeated that Japan’s economy is in a process of recovering from Covid-19 and that is it monitoring downside risks to economy stemming from high resource prices.
He added that the BOJ will not raise interest rates and will maintain easy policy for the time being until the 2% price target is achieved in a stable and sustainable way.
Kuroda said raising the long-term interest rate target from around zero percent and widening the 10-year yield target range would damage the economy.
When asked about the forward guidance, Kuroda said forward guidance reflects the impact from Covid-19, meaning guidance will not change for a few years and will depend on the outlook for growth and inflation.
Kuroda also said that he doesn't think the BOJ under the new governor will abandon the 2% price target and he expects easy policy to continue under the new executives. He said "I'm not a position who decides monetary policy" in or after April 2023 when his term ends.