Bank of Japan Governor Haruhiko Kuroda attends a news conference in Tokyo, Japan
TOKYO (Reuters) – Bank of Japan Governor Haruhiko Kuroda on Friday reiterated his view a weak yen benefits the economy as a whole, brushing aside concern the currency’s slide to multi-year lows could do more harm than good to the resource-poor, import-reliant country.
Due to structural changes in Japan’s economy, the benefit from a weak yen comes more through an increase in the value of profits companies earn overseas, rather than a rise in export volume, Kuroda said.
“There’s no change now to my view a weak yen is generally positive for Japan’s economy,” he told parliament.
Kuroda said the recent rise in import prices was driven mostly by global commodity inflation, rather than the weak yen.
“Cost-push inflation that is not accompanied by wage hikes will hurt Japan’s economy,” by weighing on households’ real income and profits of import-reliant firms, he said.
“As such, it won’t lead to sustained achievement of our price target. That’s why the BOJ will continue to maintain powerful monetary easing,” Kuroda said.
(Reporting by Leika Kihara; Editing by Jacqueline Wong & Shri Navaratnam)