Kuroda Says BOJ to Make Utmost Effort for Currency Stabilityby
Desirable that exchange rates reflect fundamentals, he says
BOJ will closely monitor FX rate’s impact on economy, he says
The Bank of Japan will make the utmost effort to achieve stability in exchange rates, Governor Haruhiko Kuroda said during a speech in Osaka on Monday.
Kuroda said it was desirable for currency exchange rates to reflect fundamentals and remain stable, and the central bank would closely monitor the impact of exchange rates on the economy and prices.
Kuroda, who earlier in his career was in charge of currency policy at the Finance Ministry, didn’t elaborate on what efforts the BOJ would make to achieve currency stability.
Marcel Thieliant, Japan economist at Capital Economics Asia in Singapore, said the BOJ doesn’t often comment on foreign-exchange developments, and he suspected Kuroda might have been trying to talk the yen weaker following the BOJ’s policy meeting on Sept. 21, particularly as it approaches the level of 100 against the dollar.
"The Bank of Japan basically didn’t announce additional easing last week, and the initial reaction was a strengthening of the yen, so I guess there was a fear that this might continue," he said.
As of Monday, the yen had gained 19 percent versus the U.S. dollar this year, undermining the BOJ’s efforts to stoke inflation and economic growth. It was trading at 100.62 as of 4:27 p.m. on Monday in Tokyo.