Bank of Japan Governor: "Yen Weakness Due to Government Intervention Temporarily Stops"

Haruhiko Kuroda, Governor of the Bank of Japan (BOJ) [Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Haruhiko Kuroda, Governor of the Bank of Japan (BOJ), evaluated on the 14th that "the abnormal and one-sided depreciation of the yen seems to have temporarily stopped."

According to the Nihon Keizai Shimbun and others, Governor Kuroda said at a press conference following a financial and economic meeting held in Nagoya that the rapid depreciation of the yen has temporarily stopped as the government intervened several times in the foreign exchange market. He stated that the sharp depreciation of the yen creates uncertainty for companies and negatively affects the Japanese economy, and positively evaluated the current situation where the yen depreciation phenomenon has somewhat calmed down.

The yen exchange rate rose from 110 yen per dollar at the beginning of this year to over 150 yen on the 20th of last month, marking the highest level in about 30 years, but has since fallen to the 130 yen range. The Japanese government conducted large-scale foreign exchange market interventions on October 9-10, selling dollars and buying yen.

Governor Kuroda said, "Not only the yen but also major currencies worldwide have depreciated against the dollar," adding, "Since the U.S. growth rate is expected to decline, it is hard to imagine the dollar continuing to rise in value alone."

Regarding the BOJ's large-scale monetary easing policy that fueled the yen depreciation, he said that Japan's inflation rate forecast will not reach 2% after next year, and "We will continue monetary easing. We will sufficiently discuss and respond to any changes in the situation." Earlier, a foreign media outlet analyzed that the BOJ is considering an exit strategy, reporting that participants at the BOJ Monetary Policy Meeting held on September 27-28 discussed the side effects of the ultra-low interest rate policy and the impact of future exit strategies.

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