IMF says yen falls driven by fundamentals, urges BOJ to keep easy policy
2022.04.21 02:15
FILE PHOTO: U.S. dollar and Japan yen notes are seen in this photo illustration June 2, 2017. REUTERS/Thomas White/Illustration/File Photo
TOKYO (Reuters) – The yen’s recent declines are driven by fundamentals and would be no reason for Japan to change economic policy, including the central bank’s ultra-low interest rates, a senior International Monetary Fund (IMF) official said.
“What we’re seeing so far on the yen is driven by fundamentals,” Sanjaya Panth, deputy director of the IMF’s Asia and Pacific Department, told Reuters in an interview late on Wednesday.
“Economic policymaking should continue to look at fundamentals. We don’t see any reason to change economic policy because what’s happening right now reflects fundamentals.”
The yen has fallen to two-decade lows against the dollar as the Bank of Japan (BOJ) continued to defend its ultra-low rate policy in contrast with heightening chances of aggressive rate hikes by the U.S. Federal Reserve.
“We do not see disorderly market conditions right now in the foreign exchange market. It’s been driven by fundamentals,” Panth said, when asked whether yen-buying currency intervention by Japanese authorities would be justified.
“Our general approach is that as long as markets aren’t disorderly, the current policy stance is appropriate,” he said.
