BOJ Kuroda Repeats Yen Weakness Benefits Japanese Economy

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Bank of Japan Governor Haruhiko Kuroda attends a press conference in Tokyo, Japan on March 16, 2020, in this photo released by Kyodo. Mandatory Credit Kyodo/via REUTERS

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TOKYO, March 25 (Reuters) – Bank of Japan Governor Haruhiko Kuroda reiterated on Friday that a weak yen benefits the broader economy, dismissing fears that the currency’s decline to multi-year lows could do more harm to the resource than good. poor and import-dependent country.

Due to structural changes in the Japanese economy, the benefits of a weak yen come more from an increase in the value of profits companies make overseas, rather than from an increase in the volume of exports, a Kuroda said.

“There is no change now in my view that a weak yen is generally positive for the Japanese economy,” he told parliament.

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Kuroda said the recent rise in import prices was mainly due to global commodity inflation, rather than yen weakness.

“Cost inflation that is not accompanied by wage increases will hurt the Japanese economy,” by weighing on real household income and the profits of import-dependent companies, he said.

“As such, this will not lead to a sustainable achievement of our price target. This is why the BOJ will continue to maintain strong monetary easing,” Kuroda said.

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Reporting by Leika Kihara; Editing by Jacqueline Wong & Shri Navaratnam

Our standards: The Thomson Reuters Trust Principles.

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