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FILE PHOTO: Bank of Japan Governor Haruhiko Kuroda in Tokyo
Por Tetsushi Kajimoto y Leika Kihara
TOKYO, April 18 (Archyde.com) – Bank of Japan Governor Haruhiko Kuroda said on Monday that recent moves in the yen have been “quite sharp” and could hurt companies’ business plans, offering his strongest warning yet. the date on the risks arising from the depreciation of the Japanese currency.
Kuroda said he has not changed his assessment that, in general, a weak yen is good for the economy, as it increases the value of profits Japanese companies make abroad.
But he added that the yen’s fall to around 125-126 yen against the dollar, from 115-116 yen a month ago, is volatile enough to hurt businesses.
“The recent fall in the yen, which has lost about 10 yen against the dollar in about a month, is quite sharp and could make it difficult for companies to establish business plans,” Kuroda told the Japanese parliament.
“In that sense, we have to take into account the negative effect” of a weak yen, he said.
Traders bought yen after the comment, helping the dollar slide 0.22% lower to 126.25 yen on Monday.
However, Kuroda reiterated his view that the Bank of Japan should maintain its massive stimulus program to support Japan’s fragile economic recovery.
The yen has fallen to a two-decade low against the dollar on the prospect of widening interest rate spreads between the United States and Japan, as the Bank of Japan is seen keeping interest rates ultra-low even as the Fed Federal plans a steady pace of rate hikes.
Kuroda has consistently preached the merits of a weak yen, despite Japanese policymakers’ growing concern that a further yen decline could hurt the economy by inflating already rising fuel import costs. and food.
(Reporting by Leika Kihara and Tetsushi Kajimoto; additional reporting by Kantaro Komiya; editing by Simon Cameron-Moore and Shri Navaratnam; translated by José Muñoz at the Gdańsk newsroom)