BOJ deputy governor repeats vigilance of FX impact on economy

Bank of Japan Deputy Governor Masayoshi Amamiya speaks during a Reuters Newsmaker event in Tokyo, Japan July 5, 2019. REUTERS / Issei Kato

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TOKYO, June 24 (Reuters) – The Bank of Japan must closely watch the impact currency moves could have on the economy, its deputy governor Masayoshi Amamiya said on Friday, reiterating a warning over the damage the currency’s fall to 24-year lows may have on a fragile recovery.

Amamiya said the world’s third-largest economy was picking up as a trend but faced “extremely high” uncertainty due to the fallout from the Ukraine crisis and rising commodity prices.

“Against this background, we must closely watch the impact financial and currency market moves could have on Japan’s economy and price,” Amamiya said in a speech.

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“The BOJ will continue to support the economy with monetary easing to achieve its inflation target in a sustained, stable manner accompanied by wage rises,” Amamiya said in a speech.

The dollar slipped to 134,795 yen on Friday as investors assess whether aggressive US interest rate hikes could trigger a recession, retreating from a 24-year high of 136.71 reached on Wednesday.

A weak yen has emerged as a headache for Japanese policymakers as it inflates the cost of already rising fuel and raw material imports, hurting retailers and households still just emerging from the COVID-19 pandemic’s pain.

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Reporting by Leika Kihara; Editing by Tom Hogue and Toby Chopra

Our Standards: The Thomson Reuters Trust Principles.

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