Governor Haruhiko Kuroda said the Bank of Japan’s unprecedented monetary easing isn’t aimed at manipulating the rate of the yen, which dropped below 101 per dollar for the first time in four years today.
“The Bank of Japan isn’t targeting the exchange rate,” Kuroda told reporters ahead of a two-day gathering of Group of Seven central bankers and finance chiefs in the U.K. starting today. “I decline to make any comment on the exchange rate level.”
Monetary policy is expected to be on the agenda at the meeting in Aylesbury, outside London. The Group of 20 last month praised the BOJ’s steps aimed at delivering 2 percent inflation within two years and ending more than a decade of deflation, signaling Japan’s focus on supporting domestic demand was strong enough to allow them to ignore the side-effects of a sliding yen on their own economies.
Japanese Economy Minister Akira Amari told reporters in Tokyo today that the yen is weakening on signs of a U.S. economic recovery, and the nation will monitor developments in the currency market. The yen was trading at 101.52 at 1:28 p.m. in London today.
Also speaking in Tokyo today, International Monetary Fund Deputy Managing Director Naoyuki Shinohara said it’s normal to see the yen weaken with the BOJ’s easing, and current foreign exchange levels are in alignment.
While the drop in the Japanese currency has boosted exporters such as Toyota Motor Corp., it has drawn criticism from competitors including South Korea. Nations from Poland to Australia have cut rates this week, with New Zealand’s central bank selling the kiwi to weaken the currency.
Kuroda also said today that volatility in the Japanese government bond market after the BOJ announced its new easing policy on April 4 had settled down.