Bank of Japan Governor Haruhiko Kuroda. (Kyodo) 

Sharp yen falls are negative and undesirable for the Japanese economy as they raise uncertainty over the outlook and make it difficult for companies to draw up business plans, Bank of Japan Governor Haruhiko Kuroda said Monday after the Japanese currency tumbled to a 23-year low against the dollar.

In a fresh verbal warning, Finance Minister Shunichi Suzuki said during a parliamentary session he sees more of the "negative side" of yen weakness emerging. But he refrained from commenting on the possibility of intervention in the foreign exchange market to arrest the yen's rapid falls.

The BOJ will carefully monitor developments in the currency markets and their impact on the economy and prices, in coordination with the government, Kuroda said.

"Recent sharp yen falls are raising uncertainty over the outlook and making it difficult for companies to compile business plans, so they are negative and undesirable for the economy," he said.

"It's important that companies that have seen their earnings improve due to the yen's depreciation will raise capital spending and wages, and a positive cycle for more income and spending will emerge for the economy," he added.

Kuroda reiterated that the BOJ will continue with monetary easing as the economy is in the midst of a recovery from the COVID-19 pandemic and rising commodity prices are putting downward pressure on the economy.

The BOJ's commitment to keeping its ultralow rate policy draws a sharp contrast with its U.S. and European peers, which are transitioning to tighter policy by raising interest rates to rein in soaring inflation.

The U.S. Federal Reserve is scheduled to hold a policy-setting meeting from Tuesday.

"Even if the yen depreciates and import costs rise, it would not be an issue as long as wages grow" to offset the impact, Suzuki said. "But now, wage growth is weak so I see more of the negative side (of yen weakness) emerging."