BOJ Governor describes the yen's gains so far this year as excessive
Apr 15, 2016 00:50GMT
BOJ Governor Haruhiko Kuroda has dismissed the view held by some in the market that deploying negative interest rates was an attempt to stem an unwelcome yen rise that hurts exports.
It was the first time the BOJ governor described the yen's gains so far this year as "excessive," wading into a series of verbal intervention by Japanese policymakers that has had little success arresting unwelcome yen gains that hurt exports. Though the yen's "excessive" rises have been corrected somewhat in the past few days, pointing to the dollar's rebound from 17-month lows hit earlier this month.
G20 meeting is concluding today, and high on the agenda will be the currency policy. The IMF on Tuesday cut Japan's growth forecast for 2016 in half to 0.5 percent, as the economy skirts recession on sluggish global demand and weak private consumption.
In a seminar in New York earlier, Kuroda acknowledged that private consumption has shown some weaknesses and stressed his readiness to ease again if risks threaten achievement of the bank's 2 percent inflation target.
A statement issued by Japan Treasury Department today, Japanese Finance Minister Taro Aso and U.S. Treasury Secretary Jack Lew has agreed on the importance of all countries to honor their G7 and G20 exchange-rate commitments. The two, who met in Washington on the sidelines of the Group of 20 finance leaders' gathering, also discussed developments in Japan's macro-economic policies including fiscal measures.
The G20 finance leaders agreed in February that countries should refrain from competitive currency devaluations, which some market players interpreted as a warning against Japan for intervening in the currency market to stem sharp yen rises. But Japan insists it has the right to step into the market if the yen's spike is out of line with fundamentals.