BOJ’s Warning of “Very Rapid” Yen Moves Triggered Strengthening of the Currency

Bank of Japan Governor Haruhiko Kuroda said recent rapid yen moves were taking on toll on the economy in remarks which in turn triggered strengthening of the yen.

“Recent yen moves have been very rapid,” Kuroda said in response to questions in parliament Monday. “A significantly weak yen or very rapid moves fuel the negative effects.”

Earlier this month Kuroda described the yen as “somewhat weak”. However, he maintained his view that a weak yen is positivity to the economy on a broader level.

The yen briefly strengthened to 126.25 against the dollar following the remarks, having reached 126.79, before Kuroda spoke.

Kuroda said, it is desirable for the FX rates to reflect  economic fundamentals and to move in stable manner.

Given the overall state of the economy, he said it was still appropriate for the central bank to continue with its monetary stimulus.