Early Thursday morning in Europe, Bank of Japan (BOJ) Governor Haruhiko Kuroda crossed wires via Reuters. The policymakers initially defended the Japanese central bank’s currency monetary policy while citing inflation concerns.
BOJ’s Kuroda then stated, per Reuters, “Japan's economic recovery to accelerate next year.”
Additional quotes
Monetary easing played key role in achieving fairly early economic recovery from pandemic.
BOJ will continue to take steps to support small, medium-sized firms' funding.
Change in interest rates have indirect effect on economy by affecting stock, currency rate moves.
Interest rates are most important tools for monetary policy.
FX rates must move stabily reflecting economic fundamentals.
FX volatility has decreased ever since BOJ adopted 2% price goal, deployed massive monetary easing.
Decrease in FX volatility plays key role in reducing uncertainty for corporate business environment.
Weak yen helps increase export volume, profits Japan firms earn overseas, but pressures household income and domestic-oriented firms' profits.
The boost a weak yen gives to export volume has diminished recently.
Impact a weak yen has on Japan firms' yen-based profits earned overseas has become larger
Negative impact of weak yen on Japan households' income may be increasing.
Overall, there's no change in structure under which a weak yen boosts economy, prices in Japan.
Benefits of weak yen exceeds demerits, though must be mindful of both positive and negative effects of weak yen on economy.
USD/JPY remains tepid
Following the news, USD/JPY remains inactive around 114.00 amid mixed concerns and wait for US data.
Read: USD/JPY defends 114.00 as yields dwindle, chatters over Japan budget, bond issue spread