Bank of Japan Governor Haruhiko Kuroda said Tuesday the yen's recent depreciation against the U.S. dollar has been "somewhat rapid," ratcheting up his rhetoric amid concern about its negative impact on the fragile economic recovery.
The remark, made at a parliamentary session, is the strongest yet since the yen tumbled to an over six-year low in March amid the prospect of a widening monetary policy gap between the BOJ and the U.S. Federal Reserve as inflation accelerates at a different pace in the two countries.
A weak yen inflates import costs for resource-scarce Japan, but also helps exporters by boosting their overseas profits when brought back home. Kuroda has said a soft yen is positive for the economy as a whole.
"Currency rate moves are somewhat rapid," Kuroda told a session of the House of Representatives.
The yen's sharp fall has fueled speculation that the government and the BOJ could step in by carrying out yen-buying, dollar-selling interventions.
Drawing on his experience as Japan's top currency diplomat, Kuroda told the session that it is difficult to measure the overall impact of interventions, whether conducted by Japan or in coordination with other nations, on the currency market.
The recent depreciation of the yen, partly due to the BOJ's powerful monetary easing, comes as higher energy and commodity prices are casting a shadow over the economy, whose recovery from the COVID-19 fallout remains fragile.
The government plans to draw up an economic package to ease the pain for consumers, hit by higher prices amid tepid wage growth.
Kuroda said the BOJ will continue to support the economy, which has yet to fully recover from the pandemic fallout, with its monetary policy.
"We will persist with our monetary easing to ensure price gains, accompanied by increased corporate earnings and wages in a virtuous cycle, not cost-push inflation," Kuroda said.
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