Bank of Japan (BOJ) Governor Haruhiko Kuroda on Monday called the yen’s recent moves “quite sharp,” warning that it could hurt earnings of Japanese firms.
“The recent falls in the yen, which lost about 10 yen to the dollar in about a month, is quite sharp and could make it hard for companies to set business plans,” Kuroda told parliament.
The remarks came after the yen fell to a two-decade low earlier on Monday, having breached 126 against the dollar.
Kuroda noted that a weak yen is beneficial to Japanese exporters and offshore firms, but the currency’s unprecedented swings indicate that it is volatile enough to hurt businesses.
“That can cause trouble for companies when they make their business plans and we will need to take into account negative factors like these,” Kuroda said.
Investors have been expecting the BOJ to consider adjustments to its policy stance to stop the weakening of the yen. Kuroda, however, asserted that the central bank must maintain its currently loose monetary policy to support the country’s fragile economic recovery.
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