BOJ Stuck in Dilemma over “Bad” Weakening of Yen
Newsfrom JapanEconomy Politics
Tokyo, April 15 (Jiji Press)--The Bank of Japan is stuck in a dilemma over the yen’s recent weakening, which Finance Minister Shunichi Suzuki has characterized as “bad” for the economy.
The Japanese currency has fallen to 20-year lows against the dollar, as the BOJ maintains its ultraeasy monetary policy while U.S. and many other central banks are in the tightening cycle.
If the BOJ remains tolerant of the yen’s slide, Japan will suffer further increases in import prices as crude oil prices keep rising. Such a development would spark criticism of the bank.
But if the BOJ raises interest rates to stem the yen’s weakness, the Japanese economy will be battered.
The yen’s drop accelerated following a speech by BOJ Governor Haruhiko Kuroda in Tokyo on Wednesday. He said that the bank will “continue its current powerful monetary easing patiently.”
[Copyright The Jiji Press, Ltd.]