Central bank won’t take monetary policy steps directly aimed at influencing FX market

  • November 10, 2022

Further comments are crossing the wires, via Reuters, from Bank of Japan (BoJ) Governor Haruhiko Kuroda, as he now speaks on the exchange rate value.

Key quotes

Merits of BoJ’s current policy outweighing costs, but aware of need to be mindful about costs of prolonged easing.

Pace of raising japan’s negative interest rate will be among key factors when boj debates exit strategy.

Another factor is how to adjust BoJ’s huge balance sheet.

We are not in stage where we can immediately debate, lay out details of exit strategy.

Recent price rises hurting households’ sentiment, real income.

Recent weak yen is undesirable.

Govt’s decision to respond to speculative, sharp and one-sided yen falls was appropriate.

Important for forex rates to move stably reflecting economic fundamentals.

Weak yen benefits big global firms, but hurts households and firms reliant on domestic demand via rising import costs.

BoJ won’t take monetary policy steps directly aimed at influencing FX market.

Sharp, one-sided yen declines appear to be pausing since Japan’s FX intervention.

Dollar has been rising almost single-handedly against other currencies reflecting strong United States growth.

Many people predict dollar’s single-handed rise likely won’t continue forever as the United States economy may suffer negative growth on steady Fed rate hikes.

Market reaction

The Japanese Yen is finding some support from the above comments, driving USDJPY lower to near-daily lows  of 146.12. The spot is down 0.18% on a daily basis.