BOJ Doesn't See Threat In Recent Yen Rise

Discussion in 'Wall St. News' started by ASusilovic, Aug 17, 2010.

  1. TOKYO (Dow Jones)--Japan's central bank believes the yen's recent rise doesn't pose an immediate threat to the economy, but it is ready to consider additional monetary steps should the currency surge or political pressure to act increase, people familiar with the situation said.

    The yen's recent appreciation has caused alarm in Japan's government, which is concerned it could throttle a recovery in the country's economy by reducing exporters' earnings and intensifying deflation. The government last week reiterated its stance that it will continue to work closely with the Bank of Japan to fight the yen's strength, and BOJ Gov. Masaaki Shirakawa issued a rare statement expressing concern about volatility in the yen and Japanese share prices.

    But some half a dozen people familiar with the central bank's thinking said the BOJ considers the yen's recent gains to be relatively mild compared to its sharp moves late last year. The threat to the overall economy so far appears limited, as the yen's rise hasn't been excessively fast and hasn't dealt a significant blow to business sentiment, they said.