Japan yen intervention was appropriate: BOJ’s Kuroda

Bloomberg

Bank of Japan (BOJ) Governor Haruhiko Kuroda said the government’s intervention in the foreign exchange market last week was appropriate given the recent volatility in the yen.
The government’s action didn’t contradict with the BOJ’s ongoing monetary stimulus as the former is aimed at countering rapid, one-sided slide in the yen while the central bank’s monetary easing needs to stay in place to shore up the economy, Kuroda said on Monday.
“The intervention was conducted by the finance minister’s decision as a necessary means to deal with excessive moves and I think it was
appropriate,” he said.
Kuroda, in his first public comments following intervention, was speaking at a media conference in Osaka after meeting business leaders in the region. The dollar was trading around 143.85 yen as of 5:03 pm Tokyo time, little moved by his comments.
Japan intervened to prop up the yen for the first time since 1998. The move came after the yen fell past the key psychological level of 145 against the greenback and Kuroda showed determination to stick with ultra-low rates for even longer than previously expected.
Kuroda also reiterated on Monday the need for ongoing monetary easing because he views the current cost-push inflation isn’t sustainable and price growth will drop below the BOJ’s 2% target next year.
The government’s action last week came almost directly after the BOJ’s ultra-low rates stance fuelled further yen weakening, triggering doubt over the authorities’ unified stance.
Following the three-day weekend, Kuroda and Finance Minister Shunichi Suzuki emphasised their stances weren’t working against each other.
“We’re strongly concerned about speculative moves, and there’s no change in our stance that we’ll respond as needed,” finance chief Suzuki said in a press conference. “We’ll continue to monitor markets with urgency, and a deep sense of concern.”
Following Suzuki’s remarks earlier in the day Kuroda repeated his views about the yen’s rapid, one-sided slide, saying it’s harmful for the economy. At the same time he stressed the need for ongoing monetary easing because he sees the current cost-push inflation as unsustainable, and expects price growth to drop below the BOJ’s 2% target next year.
Even so, Kuroda said he expects monetary stimulus to continue for years to come, indicating the wide policy gap with global peers will continue to help keep the yen weak.