BOJ’s Governor Kuroda Says Recent Yen Movement is “Somewhat Rapid”

Governor of Bank of Japan Haruhiko Kuroda said the recent slide in yen is “somewhat” rapid.

“If you look at moves in foreign exchange rates over the longer term such as the past decade, fluctuations have gotten smaller but as pointed out, the recent moves in foreign exchange rates seem somewhat rapid,” Kuroda said in response to questions in parliament Tuesday.

The yen strengthen to 112.38 against the U.S. dollar from around 122.86 earlier in the morning session on Tuesday.

Kuroda’s comments came after the yen hit the 125 mark, underscoring its weakest level since summer 2014 after the central bank set bond-yield ceiling.

The recent slide in yen somewhat concerning to policy makers since its added up to the fastest increase in energy prices in four decade. The Japanese economy is also feared to have shrunk since last quarter. Although Kuroda has denied, however many speculating the central bank might tweak policy response.

“They were the clearest signal to date from Kuroda that the BOJ is not thrilled by the yen moves of recent weeks,” said Ray Attrill, head of foreign-exchange strategy at National Australia Bank Ltd. in Sydney, as reported by Bloomberg.

Still, “in the absence of any concrete action by the BOJ or MOF, dollar-yen is still largely in the hands of the 10-year Treasury yield, and also whether the big negative terms-of-trade shock Japan is suffering from commodity prices is going to abate,” Attrill added.

Kuroda also reiterated in this remarks in the parliament that the weak yen is positive for the economy on a broader sense while its impact differs depending on changes in the structure of the economy.

“We will continue to watch foreign exchange rates closely as it has a large impact on the economy and inflation,” Kuroda said. “It’s important for currency rates to reflect the fundamentals of the economy and finance.”