TOKYO- Bank of Japan Governor Haruhiko Kuroda said on Monday the yen’s recent moves have been “quite sharp” and could hurt companies’ business plans, offering his strongest warning to date of the risks stemming from the currency’s depreciation.
Kuroda said there was no change in his assessment that overall, a weak yen was good for the economy since it boosts the value of profits Japanese firms earn overseas.
But he added the yen’s drop to around 125-126 yen against the dollar, from around 115-116 yen a month ago, was volatile enough to hurt companies.
“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.
“In that sense, we need to take into account the negative effect” of a weak yen, he said.
Traders bought the yen on the comment, helping push the dollar down by 0.22 percent to 126.25 yen on Monday.
Kuroda, however, repeated his view the BOJ must maintain its massive stimulus program to support a fragile economic recovery.
