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Prospects of widening U.S.-Japan interest rate differentials
have pushed the yen down to two-decade lows against the dollar,
stoking fear among lawmakers that a weak currency could do more
harm than good to the economy by pushing up import costs.
With the U.S. Federal Reserve eyeing aggressive interest rate
hikes, some market players have speculated that Kishida's
administration may pressure the Bank of Japan (BOJ) to modify
its ultra-loose monetary policy to stem further falls in the
yen.
Kishida said currency levels are the consequence of various
factors including economic and monetary policies.
"The BOJ is undertaking its current policy to achieve its 2%
inflation target," Kishida told a news conference.
"The government hopes the central bank continues with its
efforts to achieve the goal," he said, when asked whether the
BOJ should tweak its ultra-loose policy to prevent further
declines in the yen.
When asked about the yen's recent weakness, Kishida declined to
comment on specific levels but warned about the demerits of
sharp currency moves.
"As for the weak yen, rapid currency moves are undesirable for
many entities," he said.
The BOJ is widely expected to keep its ultra-low interest rate
targets unchanged at a two-day policy meeting that ends on
Thursday.
With inflation at far more modest levels than most Western
nations, BOJ Governor Haruhiko Kuroda has stressed the central
bank's resolve to keep monetary policy ultra-loose to support an
economy still in the midst of recovering from the COVID-19
pandemic.
(Editing by Jacqueline Wong)
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