Bank of Japan Governor Haruhiko Kuroda said that Group of 20 nations understand the case for Japan’s unprecedented monetary stimulus and indicated that he expects no censure for the yen’s slide.
“We aren’t intending to weaken the currency at all,” Kuroda told reporters today in Washington, where he’s attending his first G-20 gathering as central bank chief. The BOJ’s easing “is for a domestic policy goal to achieve the 2 percent inflation target at the earliest possible time,” he said.
The G-20 nations will affirm a commitment to avoid competitive devaluation without singling out any nation, according to a draft statement prepared for a meeting this week in Washington, Bloomberg BNA reported. The yen has dropped about 20 percent against the U.S. dollar in the past six months, the biggest loser among 16 major currencies.
“Chances are high that the result of the G-20 meeting will deliver tailwinds for Japan and yen depreciation,” Takahiro Sekido, a strategist in Tokyo at the Bank of Tokyo-Mitsubishi UFJ Ltd., who formerly worked at the BOJ, said ahead of Kuroda’s comments.
The currency touched 99.95 per dollar last week, the weakest in four years, and traded at 98.25 as of 7:05 p.m. in New York.
Asked whether the meeting of finance chiefs and central bank governors in Washington will consider the risk of Japan fueling competitive devaluations, Kuroda, 68, said: “That probably won’t be discussed much.”