IMF's Shinohara: current yen level appropriate given Japan PM Abe's policies

TOKYO Fri May 10, 2013 2:14am EDT

Naoyuki Shinohara, deputy managing director of the International Monetary Fund (IMF), wipes his eye during an interactive session of Rethinking State-led Growth in the World Economic Forum in Jakarta June 13, 2011. REUTERS/Enny Nuraheni

Naoyuki Shinohara, deputy managing director of the International Monetary Fund (IMF), wipes his eye during an interactive session of Rethinking State-led Growth in the World Economic Forum in Jakarta June 13, 2011.

Credit: Reuters/Enny Nuraheni

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TOKYO (Reuters) - The current level of the yen is appropriate given the package of policies that Japanese Prime Minister Shinzo Abe is trying to pursue, a senior International Monetary Fund official said on Friday.

Some confusion in the government bond market cannot be avoided due to the Bank of Japan's bold changes to monetary policy, but the government debt market will eventually adjust to the new policy, Deputy Managing Director Naoyuki Shinohara said at a seminar in Tokyo.

"In general, if you ease monetary policy, your currency will weaken," Shinohara said.

"If you look at Abe's policies as a whole, then the current level of the yen seems reasonable."

The dollar extended its relentless rally against the Japanese currency on Friday to break above 101 yen, its highest since April 2009.

(Reporting by Stanley White; Editing by Kim Coghill)

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