An adviser to Prime Minister Shinzo Abe indicated the yen has weakened enough and that the Bank of Japan needn’t force inflation to its 2 percent target.
“I don’t think it’s a bad thing to send a signal that selling of the yen is coming closer to its limit bit by bit,” Koichi Hamada, an adviser to Abe on monetary policy, told Bloomberg in an interview. If it weakens much further, it could be problematic, according to Hamada.
The Japanese currency traded around 120 per dollar as Hamada spoke on Tuesday, a level that’s helped drive up profits of big exporters while heaping heavier costs on small companies and importers. It’s dropped 23 percent since the Bank of Japan began unprecedented monetary stimulus two years ago.