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TOKYO, July 15 (Reuters) - Bank of Japan Governor Masaaki Shirakawa said on Thursday he was continuing to watch currency and stock price moves carefully.
“Yen rises hurt exports short-term while stock price falls have a negative impact on capex and consumer spending,” Shirakawa told a news conference.
“While the yen’s rise and stock price falls may affect Japan’s economy I expect it to remain on a recovery trend.”
Earlier the central bank raised its economic forecast for the fiscal year to next March but maintained a cautious view on an outlook clouded by deflation and anxiety over Europe’s debt woes.
The nine-member board may have debated how the political stalemate created by the ruling party’s defeat in upper house elections on Sunday could affect the outlook for the economy.
Some analysts say the government, its hands tied on fiscal policy, may lean on the BOJ if sharp gains in the yen threaten a fragile recovery.
But with little sign of that happening now, the central bank kept interest rates at 0.1 percent and held off on new policy initiatives in a unanimous vote, as widely expected. (Reporting by Leika Kihara, Tetsushi Kajimoto)