(Bloomberg) — Bank of Japan Governor Kazuo Ueda said the impact of a weaker yen has both positive and negative sides, suggesting he is determined to keep stimulus unchanged for now despite growing concerns over the yen.
Most read from Bloomberg
While it is true that the weak yen exacerbates negative economic effects by raising import prices, it also helps boost exports, including inbound spending, and boost the profits of global businesses, Ueda said in response to questions in parliament on Friday. said in.
“It is difficult to say definitively that the current weak yen is negative for the economy,” Ueda said.
BOJ watchers are keeping a close eye on the yen’s direction, especially after Ueda acknowledged that volatility in foreign exchange rates was a factor the bank considered before making changes to its yield curve control program in July. Had considered. But by taking a neutral stance on the yen’s current state, Ueda is suggesting that there is still room for encouragement at this point.
Faced with accusations from lawmakers that monetary easing is depreciating the yen and increasing the toll of inflation on households, Ueda stuck to his stance that the BOJ will maintain its ultra-loose policy as long as its inflation target is met. May he not come.
The Japanese currency traded at 150.50 per dollar shortly after Ueda spoke, close to the key level of 151.95 reached in 1990. The yen has suffered the biggest decline against the dollar among major currencies this year as investors focused on the rate. Difference.
The BOJ is sticking to the world’s last negative rate policy, while the Federal Reserve is seen on a “higher and longer” rate path.
Nevertheless, Ueda has avoided taking the same position as his predecessor Haruhiko Kuroda. Kuroda often accelerated the pace of the yen’s decline by saying it was positive for the economy overall, seemingly supporting depreciation. Ueda has not used the phrase since taking the helm of the BOJ in April.
Most Read from Bloomberg Businessweek
©2023 Bloomberg LP