By Leika Kihara
Tokyo (Reuters) – Japan must correct “any misunderstanding” owned by US President Donald Trump that his central bank intentionally weakens Yen with monetary policy, said former governor of the Bank of Japan, Haruhiko Kuroda.
Trump said on Monday that he said in Japan and China that they could not continue to reduce the value of their currencies because it would be unfair to the United States.
Asked about Trump’s comment on Friday evening, Kuroda told a Japanese television interviewer that there were limits to what Japan could do to support Yen if the dollar increased on the prospects for higher American inflation of Trump’s planned prices.
“In fact, the Japanese government has made huge efforts to prevent the Yen from weakening,” intervening on the exchange rate market to support his currency, “said Kuroda.
After an prolonged period of ultra-failed policy, the BOJ began to increase interest rates, while the government carried out rare currency market interventions in 2022 and last year to stimulate the Yen, which reached a 38-year-old hollow almost 162 years. The dollar ended this week around 148 yen.
“The Boj does not intentionally guide the yen below with monetary policy. If there is a misunderstanding on this point, it must be addressed,” said Kuroda.
Although he spoke in several seminars, it was the first time Kuroda had appeared on television since his retirement as Boj Head.
Boj to continue normalization rates
The central bank takes place the radical monetary easing that Kuroda designed during its 2013-2023 mandate to free itself from Japan from decades of deflation and growth of spraying. Under him, the BOJ deployed a massive asset purchase program in 2013, then negative interest rates and bond yield control in 2016.
The Yen’s falls caused by the initial stroke and declines more trained by prolonged low rate prospects, aroused Washington criticisms, including the first Trump administration, that Tokyo was trying to keep the yen weak to give Japanese exports a competitive advantage.
Under the current Governor Kazuo Ueda, the BOJ left the radical recovery measures in March of last year and increased short -term rates to 0.5% in January, according to Japan was about to achieve its inflation objective by 2%.
Kuroda said the Boj was doing the right step by gradually increasing rates, because maintaining an ultra-launched policy for too long could increase inflation.
“La Boj already normalizes monetary policy and will take place regularly on this front, as in gradually hiking at the levels deemed neutral” in the economy, Kuroda said.
