G20 understood Japan's policies to revive economy - BOJ's Kuroda
TOKYO (Reuters) - Japan's central bank governor and finance minister reiterated on Monday that the Group of 20 countries accepted that Japan's monetary easing is not aimed at weakening the yen, potentially giving speculators licence to push the currency down further.
Bank of Japan Governor Haruhiko Kuroda explained at a G20 summit in Washington last week that the central bank is trying to conquer 15 years of deflation and this will benefit other countries, according to testimony in parliament.
"I explained that monetary policy is focused on our 2 percent inflation target. I feel I got other countries' understanding," Kuroda said in the upper house budget committee.
The yen started the new week under pressure near a four-year low versus the dollar after the G20 stopped short of criticising Japan's reflationary policies, which have significantly weakened its currency.
In a communique after a two-day meeting, the G20 simply said it would be "mindful" of possible side effects from extended periods of monetary stimulus.
Mirroring Kuroda's views, Finance Minister Taro Aso also told the same parliament committee that the yen's weakness is a "byproduct" of Japan's policies and the ultimate aim is to end deflation and boost economic growth.
"We were expecting to hear a lot of different views about our policies," Aso said.
"My position is that the yen's decline may have resulted from our policies, but the aim of our policies is to escape deflation. Yen weakness is a byproduct."
The BOJ stunned global financial markets earlier this month by committing to open-ended asset buying to nearly double the monetary base to 270 trillion yen (1.78 trillion pounds) by the end of 2014 to break the deflationary cycle and achieve 2 percent inflation.
The absence of direct criticism of Japan's policies at the G20 is likely to comfort BOJ and finance ministry officials, especially as there were some concerns that Japan may come under fire for trying to unfairly devalue its currency to make its exports more competitive.
The BOJ is not alone in flooding its economy with cheap funds to try to boost borrowing and spending. Others have also engaged in quantitative easing, led by the U.S. Federal Reserve, the Bank of England and, to some extent, the European Central Bank.
(Reporting by Stanley White; Editing by Edwina Gibbs and Shri Navaratnam)
- Tweet this
- Share this
- Digg this
- UPDATE 4-Cricket-Australia push England to the wall in second test
- Insight - Family, politicians battle over 'Brand Mandela'
- Thai PM proposes referendum on her future as protesters prepare big push
- Israeli patrol on Golan targeted by bomb from Syria - Israel
- Australia push England to the wall in second test