BOJ's Masai: Big yen swings cause of concern for Japan
[TOKYO] Bank of Japan board member Takako Masai said large swings in exchange rates can be a concern for Japan's economy as it could hurt business sentiment, according to a text of her speech released by the central bank on Tuesday.
The yen's volatility seen in 2016, when it rose sharply against the US dollar in the first half of the year before falling toward year-end, made it hard for Japanese firms to do business, Ms Masai said in a speech in Zurich, Switzerland, on Monday.
"There is concern that these kinds of large swings in the exchange rates, if they continue, might have a negative impact on business sentiment," said Ms Masai, a former currency market analyst.
Ms Masai said risks to Japan's economy have subsided compared with the second half of last year, as a tightening job market supported household confidence and consumption.
But the BOJ stands ready to expand stimulus if necessary, as consumption and wage growth still lack momentum, she said.
"Although the momentum toward achieving the 2 per cent price stability target has been maintained, it continues to lack firmness," she said.
Ms Masai added that there is no change to the BOJ's commitment to continue with its large-scale government bond purchases even under a new policy framework targeting interest rates.
After three years of massive asset purchases failed to accelerate inflation to its 2 per cent target, the BOJ revamped its policy framework in September to one targeting interest rates from the pace of money printing.
REUTERS
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