May 2, 2016 / 4:45 PM / 4 years ago

BOJ's Kuroda: Strengthening yen may hurt Japan's economy

Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan, March 15, 2016. REUTERS/Toru Hanai/File Photo

FRANKFURT (Reuters) - Bank of Japan Governor Haruhiko Kuroda said on Monday the yen’s recent gains may hurt the country’s economy, stressing his readiness to expand monetary stimulus if the risks threaten to keep the central bank from hitting its 2 percent inflation target.

“The kind of yen rises we’re seeing now could have undesirable effects on the economy. We are closely watching how such market developments could affect Japan’s economy and prices,” Kuroda said after arriving in Frankfurt to attend the annual meeting of the Asian Development Bank.

“There’s absolutely no change to our stance that we won’t hesitate taking additional policy action if needed to achieve our 2 percent inflation target,” he told reporters.

Kuroda added that the BOJ’s monetary policy does not directly target exchange rates or stock markets.

“Our monetary policy is solely aimed at achieving our 2 percent inflation target at the earliest date possible,” he said.

The yen rose to an 18-month high against the dollar on Monday after the BOJ kept monetary policy steady last week, defying market expectations that it would expand stimulus to protect Japan’s fragile economic recovery.

Reporting by Balazs Koranyi in Frankfurt and Leika Kihara in Tokyo, editing by Larry King

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