Japan Must Address US Concerns on Yen Policy, Says Former BOJ Chief

Japan Must Address US Concerns on Yen Policy, Says Former BOJ Chief

Trump’s Currency Concerns

Former Bank of Japan (BOJ) Governor Haruhiko Kuroda stated that Japan must address any misunderstanding held by former U.S. President Donald Trump regarding its monetary policy. Trump recently claimed that Japan and China were deliberately devaluing their currencies, which he deemed unfair to the United States.

Japan’s Efforts to Stabilize the Yen

Kuroda emphasized that Japan has been actively working to prevent excessive weakening of the yen. Measures taken include market interventions to support the currency. He noted that while monetary policy plays a role, external factors such as U.S. inflation expectations and tariff policies also influence the exchange rate.

BOJ’s Shift from Ultra-Loose Policy

After years of aggressive monetary easing, the BOJ has begun normalizing interest rates. Under current Governor Kazuo Ueda, the central bank exited radical stimulus measures in March last year and raised short-term rates to 0.5% in January. These steps aim to maintain economic stability while ensuring inflation remains on target.

Past Criticism from Washington

During Kuroda’s tenure (2013-2023), the BOJ implemented massive stimulus measures, including negative interest rates and bond yield controls. These policies led to yen depreciation, drawing criticism from Washington, including during Trump’s first administration. The U.S. alleged that Japan was intentionally keeping the yen weak to boost exports.

Future Outlook for BOJ Policy

Kuroda supports the BOJ’s current approach of gradually raising interest rates, warning against both excessive tightening and prolonged ultra-loose policies. He stated that the central bank will continue adjusting rates to align with neutral levels that support sustainable economic growth.

In a research paper issued in January, Kuroda predicted that the BOJ would continue raising rates in the coming years as inflation moves toward its 2% target.

“Japan Must Address US Concerns on Yen Policy, Says Former BOJ Chief” “Japan Must Address US Concerns on Yen Policy, Says Former BOJ Chief”