Rapid Forex Movements Bad For Economy: Bank of Japan

Bank of Japan Governor Haruhiko Kuroda said Thursday that while a weak yen is positive for the Japanese economy, the negative aspects of excessively rapid foreign exchange moves should also be noted after the currency tumbled to a fresh 20-year low against the US dollar, Kyodo News reported.

Photo Insert: The yen slid below the psychologically important 130 line to the dollar after the BOJ maintained its ultra-easy monetary policy.

Speaking at a press conference after a two-day policy meeting, Kuroda said it is "appropriate" to continue with the central bank's powerful monetary easing because the sustainability of recent inflation is in doubt.

"The excessive fluctuations seen recently in a short period of time raises uncertainty over the outlook and makes it difficult for companies to draw up business plans," he added.

"It's desirable that currency moves are stable, reflecting both economic and financial fundamentals," he said. "We will be watching the impact of currency moves on the economy and prices very carefully," Mainichi Japan also reported.

The yen slid below the psychologically important 130 line to the dollar after the BOJ maintained its ultra-easy monetary policy and showed its determination to defend its cap on Japanese long-term interest rates.

The US Federal Reserve, meanwhile, is expected to raise rates more aggressively. The BOJ said it will carry out purchases of 10-year Japanese government bonds at a fixed rate of 0.25 percent -- the upper limit allowed by the central bank -- every business day.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic