Concern about weakening the yen shouldn’t prevent the Bank of Japan from easing monetary policy further if necessary, said Masahiro Kawai, a university professor who has collaborated on research with Governor Haruhiko Kuroda.
“I have no doubt the yen will fall further and it wouldn’t cause problems because companies and households will adjust as long as the rate reflects economic fundamentals,” Kawai said in an interview on Thursday in Tokyo. The currency at its current level is beneficial for the economy, he said, predicting that it could fall well below 120 against the dollar.
Kawai, one of 10 private-sector advisers to the BOJ including the head of the Keidanren business lobby, is seen by economists at JPMorgan Chase & Co. and SMBC Nikko Securities Inc. as a potential pick for a seat opening up on the central bank’s policy board in June. His remarks come as some lawmakers express concern about strain that the yen’s more than 20 percent decline in the past two years is putting on small companies and regional economies in Japan.