'Matter of concern': Japan's premier, central bank chief discuss sharp yen depreciation

By Riyaz ul Khaliq

ISTANBUL (AA) – Japan’s premier and central bank chief met on Monday for discussions on the rapid depreciation of the yen, with both agreeing that the spiraling currency is a “matter of concern.”

However, comments made after the meeting by Prime Minister Fumio Kishida and Haruhiko Kuroda did not indicate any immediate change in the Bank of Japan’s policy to support the currency of the world’s third-largest economy.

“There were talks that the sharp fall of the yen represents a matter of concern,” said Kishida, who last met Kuroda in March, according to a Kyodo News report.

The Japanese yen has lost nearly 20% of its value against the US dollar since March, slumping to 135.6 last week, the lowest level since August 1998.

Kuroda said he told the premier that the yen’s depreciation is “undesirable because it will bring various uncertainties in companies’ business plans.”

“The central bank will closely monitor currency movements and respond appropriately in coordination with the government,” he said, adding that he has not been given any specific instructions by Kishida.

The meeting came after last week’s comments by Japanese Finance Minister Shunichi Suzuki, who expressed concern over the yen’s rapid decline and said the government would coordinate with the central bank for appropriate action.

The Bank of Japan has so far chosen not to follow its Western counterparts in tightening monetary policies and raising interest rates to combat soaring inflation.

At its meeting last Friday, the Japanese central bank decided to maintain its ultra-low interest rates at minus 0.1% for short-term and 0% for long-term.

Japan’s annual inflation rate was 2.5% in April.