TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda said he was not making any assessment on nominal yen levels or predicting its future moves when he described the yen as being “very weak” in comments to parliament last week.
The yen jumped against the dollar when the central bank chief said the yen’s real, effective level was already very weak and was unlikely to weaken further.
Speaking again in parliament on Tuesday, Kuroda said he made the remark to explain the yen’s historical trend on a real, effective basis and was not signaling that the currency’s nominal levels were too weak.
“I didn’t say I do not want a weak yen,” Kuroda said.
He repeated that while a weak yen boosts exports and revenues at companies operating overseas, it hurts households and non-manufacturers by pushing up import costs.
“As long as exchange rates move stably in a way reflecting economic fundamentals, they won’t do any harm to the economy,” he said.
The BOJ has kept monetary policy steady after expanding its stimulus program in October last year to prevent slumping oil costs, and a subsequent slowdown in inflation, from delaying a sustained end to deflation.
The most prominent effect of the stimulus program has been seen in a sharply weaker yen, which boosted exporters’ revenues and stock prices but cooled household spending by pushing up the cost of imports.
Editing by Chris Gallagher & Shri Navaratnam