(Reuters) - Bank of Japan Governor Haruhiko Kuroda said on Friday that the yen's weakening is broadly positive for the Japanese economy as long as it reflected the underlying fundamentals.
While a weaker yen pushes up import costs and domestic prices, it also helps improve exporters' profits, Kuroda told lawmakers in parliament.
"If the yen weakens in line with the actual state of the economy, I don't think it will cause big problems," Kuroda told lawmakers.
"It's probably a plus on the whole" The comments helped the dollar gain more upside momentum against the yen.
The dollar was trading at around 108.83 yen, having been on a strong bull-run over the past several weeks as investors targeted their trading strategies to synch with the diverging monetary policies between Japan and the United States.
Kuroda said a weak yen is a big plus for large exporters and though it's a minus for non-manufacturers that rely on imports, the central bank chief reiterated that the overall economy won't be negatively impacted. Kuroda was responding to an opposition lawmaker who questioned him about the economic impacts of a weaker currency.
His remarks appeared to contrast with those of Economy Minister Akira Amari, who warned on Wednesday that excessive yen moves were undesirable for the economy, after the currency hit a six-year low of 110.09 against the dollar.
Kuroda said he remained committed to achieving the BOJ's 2 percent inflation target at the earliest possible stage, but again signaled no imminent need to ease monetary policy further.
He remained bullish on prices, arguing weaker energy prices were behind the slowdown in inflation but expects it will pick up pace again from the latter half of the current fiscal year, underpinned by a tightening labor market.
The BOJ has stood pat on monetary policy since deploying an intense burst of stimulus in April last year, when it pledged to achieve its 2 percent inflation in roughly two years via aggressive asset purchases.
reuters.com
While a weaker yen pushes up import costs and domestic prices, it also helps improve exporters' profits, Kuroda told lawmakers in parliament.
"If the yen weakens in line with the actual state of the economy, I don't think it will cause big problems," Kuroda told lawmakers.
"It's probably a plus on the whole" The comments helped the dollar gain more upside momentum against the yen.
The dollar was trading at around 108.83 yen, having been on a strong bull-run over the past several weeks as investors targeted their trading strategies to synch with the diverging monetary policies between Japan and the United States.
Kuroda said a weak yen is a big plus for large exporters and though it's a minus for non-manufacturers that rely on imports, the central bank chief reiterated that the overall economy won't be negatively impacted. Kuroda was responding to an opposition lawmaker who questioned him about the economic impacts of a weaker currency.
His remarks appeared to contrast with those of Economy Minister Akira Amari, who warned on Wednesday that excessive yen moves were undesirable for the economy, after the currency hit a six-year low of 110.09 against the dollar.
Kuroda said he remained committed to achieving the BOJ's 2 percent inflation target at the earliest possible stage, but again signaled no imminent need to ease monetary policy further.
He remained bullish on prices, arguing weaker energy prices were behind the slowdown in inflation but expects it will pick up pace again from the latter half of the current fiscal year, underpinned by a tightening labor market.
The BOJ has stood pat on monetary policy since deploying an intense burst of stimulus in April last year, when it pledged to achieve its 2 percent inflation in roughly two years via aggressive asset purchases.
reuters.com
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