The weak yen is negative for Japan's economy, BOJ Governor Kuroda says.
Bank of Japan Governor Haruhiko Kuroda said on Thursday that the BOJ will maintain its easing stance to support the economy for the time being and the bank will not raise policy interest rates despite concern over depreciation of the yen, which weakened sharply as monetary policy was left on hold.
But Kuroda told a news conference that yen weakness has a negative effect and that the BOJ is in close contact with the government as it monitors the impact of the exchange rate on economy and prices. (See MNI INSIGHT: Yen At 150 Would Put Pressure On BOJ)
“Recent forex moves are one-way and are caused by speculative trading, and the rapid weak yen is increasing uncertainties and making it difficult for firms to plan their future businesses,” Kuroda said.
Spreads between U.S. and Japanese rates are one reason for the weakening of the yen but rate hikes by the Federal Reserve will put downward pressure on the U.S. economy, he added.
The yen had depreciated more than 1% on the day after the BOJ left its easy monetary policy on hold earlier on Thursday, nearing 146 to the dollar.