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The
yen spiked against the dollar during the global financial crisis
in 2008 because the extent of monetary easing by the BOJ was
much smaller than the quantitative easing policy deployed by the
U.S. Federal Reserve, Sakurai said.
By the time the BOJ adopted yield curve control (YCC) in 2016,
fluctuations in the dollar-yen rate became smaller because the
direction and scale of monetary policies in major economies have
become "quite similar," he said in an essay titled "Japan's
Monetary Policy Experience and Lessons."
This year, major economies have implemented large-scale stimulus
measures as the spread of COVID-19 has brought about a global
depression, Sakurai said.
"What is noteworthy about the current response is that policy
coordination between governments and central banks in major
economies and close cooperation among major central banks ...
have been established quickly and are functioning effectively,"
Sakurai said.
"As a result, despite some temporary swings, exchange rates
between the major economies have remained stable," he added.
Sakurai said the BOJ has used "all possible tools at its
disposal" to combat the pandemic, taking into account its
experience battling the global financial crisis.
"It will need to continue to cooperate closely with the
government and other central banks to implement flexible and
bold policies in a timely and appropriate manner," he said.
The BOJ eased policy twice this year mainly by ramping up asset
buying and creating a lending facility to channel funds via
financial institutions to smaller firms hit by COVID-19.
(Reporting by Leika Kihara; Editing by Simon Cameron-Moore)
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