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.