BOJ debated weak yen, warned of harm from excess moves – April minutes
2022.06.22 04:06
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A man walks past Bank of Japan’s headquarters in Tokyo, Japan, June 17, 2022. REUTERS/Kim Kyung-Hoon
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By Leika Kihara
TOKYO (Reuters) -The yen’s rapid decline was among key topics of debate at the Bank of Japan’s April policy meeting with some board members fretting that excessive volatility could disrupt corporate business plans, minutes of the meeting showed on Wednesday.
A few in the nine-member board said the BOJ must communicate to markets its monetary policy aims at achieving price stability, not at controlling exchange rate moves, the minutes showed.
The BOJ must look not at commodity prices and currency moves themselves, but at the impact they could have on the economy and inflation, some members were quoted as saying.
“A few members said excessive fluctuations in the foreign exchange market over a short period of time, such as those observed recently, would raise uncertainties about the future and make it more difficult for firms to formulate their business plans,” the minutes showed.
Many board members stressed the need to maintain the BOJ’s massive stimulus programme with rising raw material prices, driven partly by Russia’s invasion of Ukraine, weighing on the import-reliant economy, according to the minutes.
At the April meeting, the BOJ strengthened its commitment to keep interest rates ultra-low by vowing to buy unlimited amounts of bonds daily to defend its yield target, triggering a fresh sell-off in the yen.
