Recasts with Kuroda’s comments, details
By Leika Kihara
TOKYO, May 13 (Reuters) – Bank of Japan Governor Haruhiko Kuroda said recent sharp yen moves were undesirable, echoing comments by the finance minister in a sign policymakers were focusing on the speed of moves in gauging the impact of the currency’s slump on the economy.
Kuroda said the yen’s drop would affect households and firms in different ways, refraining from repeating his past comments a weak yen was generally good for Japan’s economy.
“It’s important for currency rates to move stably reflecting economic and financial fundamentals,” Kuroda told parliament on Friday.
“The recent sharp, short-term fluctuations in the yen are undesirable, as it heightens uncertainty and makes it harder for companies to set business plans,” he said on Friday.
The remarks were line with those made by Finance Minister Shunichi Suzuki, who said recent sharp yen moves were undesirable and that exchange-rate stability was important.
“A weak yen gives exports a boost but leads to higher import prices,” he told the same parliament session.
The yen’s slump to two-decade lows against the dollar has emerged as a source of concern for Japanese policymakers, as it inflates already rising costs of fuel and raw material imports.
Kuroda had repeatedly said a weak yen is good for the economy as a whole, as it boosts the value of profits Japanese firms earn overseas. The view contrasted with Suzuki’s remarks that recent yen falls were bad for the economy.
In Friday’s parliament session, Kuroda reiterated the BOJ’s resolve to keep monetary policy ultra-loose to support an economy that has yet to emerge from the pain inflicted by the COVID-19 pandemic.
“The economy is in the midst of a recovery and now faces headwinds from rising commodity prices,” Kuroda said. “It’s therefore important to underpin economic activity with powerful monetary easing.”
(Reporting by Leika Kihara; Editing by Tom Hogue and Kim Coghill)
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