Tokyo [Japan], June 18: Bank of Japan (BOJ) Governor Haruhiko Kuroda on Friday warned again that the Japanese yen's recent rapid depreciation is "negative" for the Japanese economy.
The central bank chief said that currency moves should be stable and reflect economic and financial fundamentals.
The BOJ maintained its ultralow rate policy after a regular two-day meeting that ended Friday, causing the yen to slump sharply against the U.S. dollar as the unchanged ultra-easing policy further diverged against the decisions of other central banks in the west.
In a press conference after the policy meeting, Kuroda said that monetary easing is necessary to achieve its 2-percent inflation target stably and sustainably.
"The recent rapid weakening of the yen is raising uncertainty over the outlook and making it hard for companies to draw up business plans so it is negative and undesirable for the economy," Kuroda said.
"We will have to closely watch developments in financial and currency markets and their impact on the economy and prices," he said, adding that the BOJ does not lead policy to target foreign exchange rates.
"Policy tightening is not appropriate at this point," the governor said.
Kuroda emphasized his resolve to defend the upper limit on the benchmark 10-year Japanese government bond yield at 0.25 percent even though other central banks have been raising interest rates to an unseen extent.
He said that the BOJ does not plan to allow the yield to increase above that limit by expanding the trading band, dismissing some market speculation that such a move would be possible.