Bank of Japan Governor Committed to Stability

Bank of Japan Governor Masaaki Shirakawa said Thursday the central bank is committed to ensuring the stability of the country’s financial system in the event the eurozone debt crisis deepens.

In his speech in Tokyo, Shirakawa also warned of the negative impact that a strong yen may have on the Japanese economy and prices, pointing out that global economic prospects face “significant uncertainty” and adding the BOJ will closely monitor whether the situation leads to acceleration of Japanese firms shifting operations overseas.

While a firm yen can work positively for domestic demand-related sectors such as retail sales and imports of energy, its “negative effect is dominant,” as “the stronger yen causes a decline in exports and corporate profits as well as deterioration in business sentiment,” he said.

Shirakawa said the central bank, which employs monetary easing policy to support the economy, continues to conduct monetary policy appropriately.

“At present, the Bank of Japan pays utmost attention to maintaining the stability of the financial markets and the financial system even if nervousness regarding the European debt problem increases,” Shirakawa said.

via Mainichi

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza