Bank of Japan’s Kuroda Defends Negative Rates, Says Not Aimed at Weakening Yen

Japan’s central bank governor on Thursday said the bank’s adoption of negative interest rates was not directly aimed at weakening the yen, dismissing wider criticism that the policy was a failure amid a surge in the local currency.

The Bank of Japan stunned markets by deploying negative interest rates last month to prevent financial market volatility from hurting business confidence and delaying an exit from deflation.

The move, however, has failed to override a wave of global risk-aversion that has sent global stock markets into a slump and bolstered appetite for the safe-haven yen.

BOJ Governor Haruhiko Kuroda said policy objectives around price and currency stability were not the same thing in large economies like Japan. He also blamed persistent market volatility on investors’ concerns over China’s slowdown, slumping oil prices and banking-sector woes in Europe.

“Global market jitters have not yet subsided,” Kuroda told an upper house financial committee meeting on Thursday.

Reuters

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.