Japan must fix ‘misunderstanding’ it is manipulating yen, says ex-BOJ chief Kuroda

Written by Lika Kihara

TOKOUS (Reuters) – Former Japan Governor Haroko Coroda said that Japan should be suitable for “any misunderstanding” by US President Donald Trump that its central bank deliberately weakens the monetary policy.

Trump said on Monday that he told Japan and China that it could not continue to reduce the value of their currencies, because doing this would be unfair to the United States.

When asked about Trump’s comment on Friday night, Coroda told one of the Japanese TV interviews that there are limits to what Japan could do to support the yen if the dollar rises on the possibilities of high inflation in the United States of the planned Trump tariff.

“In fact, the Japanese government is making great efforts to prevent the yen from weakness,” Coroda said, such as interfering in the stock market to support its currency.

After a long period of very easy policy, BOJ began to raise interest rates, while the government made interventions in the rare currency market in 2022 and last year to reinforce the yen, which in July reached 38 years near 162 to the dollar. The dollar ended this week about 148 yen.

“Boj deliberately directs the yen with monetary policy. If there is any misunderstanding on this point, it must be addressed,” said Coroda.

While he spoke in many seminars, this was the first time that Corude appeared on TV since his retirement as Boj Head.

BOJ to continue normalizing prices

The central bank relaxes the radical monetary mitigation that Coruda designed during its presidency 2013-2023 to break Japan from contracts of shrinkage and gossip growth. Under his resurrection, BOJ published a huge program to buy assets in 2013, then negative interest rates and control of bond returns in 2016.

Yen is descended from the initial blow of the incentive, and further declines driven by the horizons of low rates, and draw criticism from Washington, including the first Trump administration, which Tokyo was trying to keep the yen weak to give Japanese exports a competitive advantage.

Under the current ruler, Kazo Oda, BOJ came out of radical stimulus measures in March last year and raised short -term rates to 0.5 % in January, so well that Japan was 2 % to achieve inflation goal.

Coruda said that Boj was taking the right step by gradually raising rates as maintaining a very long -term policy of symbols may lead to increased inflation.

“BOJ is already normalizing monetary policy and will continue steadily on this front, like hiking rates gradually towards levels that are neutral” for the economy.

“Raising prices quickly than neutral rates or maintaining a long inappropriate period,” he said.

In a search paper issued in January, Coruda said that BOJ is likely to continue to raise rates in the coming years as inflation appears on the right path to hit its 2 % goal sustainable.

(Participated in the coverage of Lika Kihara; additional reports by Takahiko Wada; Liberation of William Malaard)