Bank of Japan Gov. Haruhiko Kuroda on Monday reaffirmed his easy policy stance, rejecting some calls to raise interest rates to prevent the yen from depreciating further.
“We need to continue current easy monetary policy” because Japan hasn’t seen 2% inflation yet and isn’t in a phase to discuss monetary tightening, Kuroda said in a parliamentary committee meeting.
Kuroda and Finance Minister Shunichi Suzuki both warned that a rapid weakening of the yen could have negative effects on the Japanese economy.
Suzuki said the yen’s recent depreciation may have relatively more significant negative aspects because companies have difficulties passing on higher costs to consumers, and wage growth remains slow.
Kuroda said the impact of the yen’s weakness is different for each corporate sector, but he reiterated that it is positive overall for the Japanese economy by boosting overseas earnings.