TOKYO: Japan must fix “any misunderstanding” held by US president Donald Trump that its central bank was intentionally weakening the yen with monetary policy, former Bank of Japan (BoJ) governor Haruhiko Kuroda says.
Trump said last Monday he had told Japan and China they could not continue to reduce the value of their currencies, as doing so would be unfair to the United States.
Asked about Trump’s comment last Friday night, Kuroda told a Japanese television interviewer there were limits to what Japan could do to prop up the yen if the US dollar were to rise on prospects of higher US inflation from Trump’s planned tariffs.
“In fact, the Japanese government has been making huge efforts to prevent the yen from weakening,” such as by intervening in the exchange-rate market to support its currency, Kuroda said.
After a prolonged period of ultra-easy policy, the BoJ has begun raising interest rates, while the government made rare currency market interventions in 2022 and last year to boost the yen, which in July hit a 38-year low near 162 to the US dollar. The US dollar ended last week around 148 yen.
“The BoJ is not intentionally guiding the yen lower with monetary policy.
“If there’s any misunderstanding on that point, it needs to be addressed,” Kuroda said.
While he has spoken in several seminars, it was the first time Kuroda appeared on television since retiring as BoJ head.
The central bank is unwinding the radical monetary easing that Kuroda engineered during his 2013-2023 tenure to break Japan free from decades of deflation and sputtering growth. — Reuters