Bank of Japan Governor Masaaki Shirakawa said the central bank is watching how the yen’s advance has been affecting the nation as Europe’s debt crisis and weaker U.S. economic data bolster demand for the currency.
We’ve been monitoring “the recent appreciation of the yen,” Shirakawa said at a forum in Tokyo today. “The bank carefully monitors the development of the foreign-exchange rate from the viewpoint of how it affects the economy through its impact on business sentiment.”
The yen climbed near a four-month high against the dollar last week, renewing concern that the currency’s advance will erode exporters’ profits. Japanese Finance Minister Jun Azumi declined to comment on whether authorities have intervened in currency markets or will do so after pledging last week to take “decisive” action when needed.
Japan’s currency traded at 78.17 per dollar as of 2:02 p.m. in Tokyo compared with a record 75.35 reached in October. The yen tends to strengthen in times of crisis and has advanced more than 6 percent against the dollar since mid-March.