Tuesday, May 30, 2023
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The Bank of Japan's Wakatabe said the yen's recent volatility was too fast and one-sided

Leika Kihara

WASHINGTON (Reuters) – Bank of Japan Deputy Governor Masaru Wakatabe said on Saturday that the yen’s recent volatility was “clearly too rapid and too one-sided,” suggesting that People are cautious about the yen exchange rate. Possible economic damage from USD/USD falling to 32 year lows.

Wakatabe, speaking at a symposium on the sidelines of the annual meetings of the International Monetary Fund and the World Bank in Washington, also said that the Japanese government has made it clear that its efforts to curb the excessive depreciation of the yen are closely related to There is no inconsistency or inconsistency between the Bank of Japan’s ultra-easy monetary policy aimed at achieving its 2% inflation target.

“Prime Minister Fumio Kishida supports loose monetary policy to escape the low inflation environment,” Wakatabe said when asked if the Bank of Japan’s ultra-low interest rate policy was weighing on the yen, which was in line with government curbs Efforts to fall sharply in the yen were contradicted by currency intervention.

He was referring to Japan’s leader r recently telling the Financial Times that the BOJ needs to maintain its ultra-easy policy until wages rise.

Asked about the yen’s recent sharp decline, the Bank of Japan’s deputy governor said: “When it talks about foreign exchange volatility now, it’s obviously too fast and too one-sided.”

Under Japanese law, the Ministry of Finance, not the Bank of Japan, has jurisdiction over exchange rate policy.

Japan intervened in currency markets last month to stem a sharp fall in the yen, largely due to policy differences between aggressive U.S. interest rate hikes and the Bank of Japan’s determination to maintain ultra-easy monetary policy.

Wakatabe said the Bank of Japan must maintain ultra-easy monetary policy as wage growth remains weak and inflation expectations, while rising, are not yet firmly anchored around the 2 percent inflation target.

“We don’t want to overshoot and undershoot. We want inflation to stabilize at 2 percent going forward. That’s when we’re going to think about changing policy,” Wakatabe said. He said price changes must be consistent with achieving our 2% target” before a change in ultra-easy policy can be considered.

BOJ remains an outlier among global central banks, many of which are tightening Monetary Policy

Japan’s core consumer inflation accelerated to 2.8% in August, surpassing the BOJ’s 2% target on price pressures from raw materials and a weaker yen It expanded for the fifth consecutive month.

Bank of Japan Governor Haruhiko Kuroda said at a separate seminar on Saturday that inflation may fall below 2 percent in the next fiscal year, stressing the need to Stay ultra-loose.



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